Accounting Earnings Announcements, Institutional Investor Concentration, and Common Stock Returns

[Excerpt] This study examines the relation between the level of institutional investor ownership and the magnitude of security price variability at quarterly earnings announcement dates. Prior research consistently documents a negative association between firm size and announcement-date return variability. One explanation for this finding is that as more timely, alternative information becomes available on large firms prior to an announcement date, their security prices become informative, thereby reducing the information content of the earnings announcement. Large firms are closely followed by institutional investors. These investors dedicate substantial resources to information search. Therefore, the link between size and information production may be attributable to the influence of institutional investors on the information production process. Because institutional trades can also affect security prices, however, the precise impact of institutional following on the variability of prices at quarterly earnings dates is not evident.

REITs: Structure and Performance

[Excerpt] REITs are attractive to investors, particularly institutional investors, due to their high dividend payouts and ability to provide more liquidity to the underlying market for direct real estate investment. This chapter analyzes the performance of real estate investment trusts (REITs). It compares the returns on REITs with those on more traditional asset classes, specifically bonds and mid-cap equities, and surveys the academic literature dealing with the diverse issues related to valuation. The chapter also examines the linkages between REIT performance and the behavior of the underlying real estate market. Because the chapter takes the perspective of a U.S.-based investor, it does not directly address the broader issues of global REITs.