Securities Lending Activities in Mutual Funds and ETFs: Ethical Considerations

Lee M. Dunham, Randy Jorgensen, Ken Washer

Research output: Contribution to journalArticlepeer-review


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.

Original languageEnglish (US)
Pages (from-to)21-28
Number of pages8
JournalJournal of Business Ethics
Issue number1
StatePublished - Nov 1 2016

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Business, Management and Accounting(all)
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law


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