Securities Lending Activities in Mutual Funds and ETFs: Ethical Considerations

Lee M. Dunham (), Randy Jorgensen () and Ken Washer ()
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Lee M. Dunham: Creighton University
Randy Jorgensen: Creighton University
Ken Washer: Creighton University

Journal of Business Ethics, 2016, vol. 139, issue 1, No 2, 28 pages

Abstract: Abstract Securities lending has been a lucrative business for mutual funds and exchange-traded funds (ETFs) over the past decade. Unfortunately for investors, the sponsors of these funds have not been very transparent with the details of their securities lending programs, and consequently most investors in these funds are unaware of their exposure to the risks inherent in securities lending. Interestingly, most funds do not return the full profits from securities lending activities to their investors. In this paper, we examine and discuss the ethical considerations related to the securities lending activities of mutual funds and ETFs and offer a series of best practices that we believe will provide better transparency of these activities to fund investors.

Keywords: Securities lending; Ethics; Business ethics; Mutual funds; ETFs (search for similar items in EconPapers)
JEL-codes: G11 G14 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10551-015-2609-1

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