Financial Transaction Tax and Investment Funds: An Analysis of Key Factors and Their Impact on Performance

Posted: 3 Jun 2015 Last revised: 20 Jul 2015

See all articles by Eva Eberhartinger

Eva Eberhartinger

Vienna University of Economics and Business

Carmel Said Formosa

Vienna University of Economics and Business

Date Written: 2015

Abstract

Using retrospective data analysis, this paper looks at the potential effects that the EU financial transaction tax would have on registered Austrian funds. We use original data for 927 investment funds over a 12-month trading period covering the 2014 calendar year. We analyse its effect on total net assets and on performance. We find that the cost of FTT on Austrian funds for 2014 would be € 89.5 million. The effect of FTT differs between funds and is influenced by fund category, gilt-edged securities held, risk and investment strategy. Behavioural changes in the market would likely arise in these areas if FTT were to be introduced.

Keywords: FTT, transaction tax, investment funds, investment strategies

Suggested Citation

Eberhartinger, Eva and Formosa, Carmel Said, Financial Transaction Tax and Investment Funds: An Analysis of Key Factors and Their Impact on Performance (2015). WU International Taxation Research Paper Series No. 2015 - 20. Available at SSRN: https://ssrn.com/abstract=2613880 or http://dx.doi.org/10.2139/ssrn.2613880

Eva Eberhartinger

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna 1020
Austria

HOME PAGE: http://www.wu.ac.at

Carmel Said Formosa (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

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