AFFILIATED AGENTS, BOARDS OF DIRECTORS, AND MUTUAL FUND SECURITIES LENDING RETURNS

In: The journal of financial research: the journal of the Southern Finance Association and the Southwestern Finance Association, Band 37, Heft 4, S. 461-494

Abstract

AbstractUsing a manually collected U.S. index mutual fund sample, we find that funds with sponsor‐affiliated lending agents have lower annual returns on lent securities and that securities lending returns are significantly higher when funds administer their own lending programs. We also document that multiple board of director appointments, more director fund ownership, higher board independence, and lower excess director compensation are associated with higher lending returns. Overall, the evidence has implications for mutual fund boards as they consider lending proposals and for future regulatory actions.