Institutional Ownership and Future Stock Returns: An International Perspective

Teodor Dyakov*, Evert Wipplinger

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review


We investigate the risk-adjusted performance of the aggregate equity holdings and trades of 13,807 active mutual funds located in 16 countries between 2001 and 2014. Using portfolio sorts, we find weak evidence that institutional holdings exhibit positive subsequent risk-adjusted returns. However, any outperformance is unlikely to stem from short-term informational advantage: stocks bought do not outperform stocks sold in the subsequent quarter. This finding is robust to regressions of subsequent stock returns on changes in institutional ownership and holds for different measurements of institutional trading.

Original languageEnglish
Pages (from-to)235-245
Number of pages11
JournalInternational Review of Finance
Issue number1
Publication statusPublished - 1 Mar 2020

Cite this