Stock Splits: Evidence from Mutual Funds

Posted: 19 May 2006

See all articles by Michael S. Rozeff

Michael S. Rozeff

SUNY at Buffalo - Department of Financial & Managerial Economics

Abstract

Mutual fund splits occur in high-priced funds after unusually high returns. Split factors are related to the deviation of a fund's price from the mean of other funds' prices. Post-split numbers of shareholders and assets do not increase compared with funds having similar rates of asset growth. However, I find evidence that mutual fund splits bring per account shareholdings back up to normal levels. I argue that signaling, liquidity, and tick size theories do not apply to mutual fund splits.

Keywords: stock splits, mutual funds

JEL Classification: G11, G12, G14

Suggested Citation

Rozeff, Michael S., Stock Splits: Evidence from Mutual Funds. Journal of Finance, Vol. 53, No. 1, pp. 335-349, February 1998. Available at SSRN: https://ssrn.com/abstract=844948

Michael S. Rozeff (Contact Author)

SUNY at Buffalo - Department of Financial & Managerial Economics ( email )

Buffalo, NY 14260
United States

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