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Available. Open Access. Open Access

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Journal of Economics, Finance and Administrative Science, vol. 28 no. 56
Type: Research Article
ISSN: 2077-1886

Available. Open Access. Open Access
Article
Publication date: 11 October 2024

Luis Chavez-Bedoya

164

Abstract

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Journal of Economics, Finance and Administrative Science, vol. 29 no. 58
Type: Research Article
ISSN: 2077-1886

Available. Open Access. Open Access
331

Abstract

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Journal of Economics, Finance and Administrative Science, vol. 29 no. 57
Type: Research Article
ISSN: 2077-1886

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Article
Publication date: 20 April 2020

Enrique Ogliastri, Juan Carlos Leiva, Rachel Gabel-Shemueli and Luis Chavez-Bedoya

138

Abstract

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Academia Revista Latinoamericana de Administración, vol. 33 no. 1
Type: Research Article
ISSN: 1012-8255

Available. Open Access. Open Access
Article
Publication date: 26 October 2018

Luc Chavalle and Luis Chavez-Bedoya

This paper aims to analyze the impact of transaction costs in portfolio optimization in Peru. The study aims to compare the transaction costs structure applied in Peru with…

5366

Abstract

Purpose

This paper aims to analyze the impact of transaction costs in portfolio optimization in Peru. The study aims to compare the transaction costs structure applied in Peru with respect to the ones applied in the USA, and over a few dimensions.

Design/methodology/approach

The paper opted for an empirical study analyzing the cost of rebalancing portfolios over a set period and dimensions. Stocks have been carefully selected using Bloomberg terminals, and portfolio designed then rebalanced using VBA programming. Over a few dimensions as type and number of stocks, holding period and trading strategy, the behavior of these different transaction costs has been compared. The analysis has been done for four different portfolios.

Findings

The paper provides empirical insights about how a retail investor actively trading in Peru can pay up to 14 times more in transaction costs than trading the same portfolio in the USA. These comparatively high transaction costs prevent retail investors to trade in the Peruvian stock market while fueling illiquidity to this market.

Research limitations/implications

The paper deals with a limited amount of Peruvian stocks. Researchers are encouraged to test the proposition further, including other dimensions.

Practical implications

The paper includes implications for any retail investor that wants to invest in Peruvian stocks, giving an insight about how expensive it is to actively rebalance a portfolio in Peru.

Originality/value

This paper fulfils an identified need to study how much it costs to actively invest on the stock market in Peru.

Details

Journal of Economics, Finance and Administrative Science, vol. 24 no. 48
Type: Research Article
ISSN: 2077-1886

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