An Examination of Institutional Dividend Clienteles: Evidence from Australian Institutional Portfolio Holdings

Abstract

Shareholdings for a sample of forty-nine Australian institutional equity funds show that dividend policy affects institutional holdings. Institutions tend to hold stocks that pay dividends, but among dividend-paying stocks there is no simple preference for stocks with either the highest or lowest dividend yields or dividend payout ratios. We also investigate whether dividend franking status affects institutional ownership. Institutions tend to have a higher ownership in stocks which carry full imputation tax credits compared to stocks which have partial, or zero imputation tax credits.

Keywords: dividend clienteles, institutions, portfolio holdings, imputation tax credits

JEL Classification: G23