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<p>This paper reconstructs and examines the portfolios of 75 foreign investment funds (FIFs) active in the Spanish stock market between 1961 and 1978. Spain during this period offers a revealing case study, as the country transitioned from autarkic isolation toward progressive liberalisation and rapid economic growth, while remaining under the institutional constraints of the Franco regime. Drawing on a hand-collected panel dataset from the <i>Boletín Financiero</i> of the Barcelona Stock Exchange—encompassing over 4000 quarterly transactions and 153 securities— we evaluate investment returns, portfolio composition, concentration, and turnover across three distinct investment cycles. Applying the Direct Alpha method and asset-pricing models (CAPM, Henriksson- Merton, Fama-French three-factor), we find that FIFs consistently outperformed Spanish benchmarks, generating annualised abnormal returns of approximately 2.8-3.2% with market betas below unity. These abnormal returns—while potentially reflecting unobserved risks inherent in operating within an imperfect, opaque, and politically constrained market—stemmed not from systematic market timing but from selective stock picking and defensive portfolio structures. Investment strategies evolved alongside Spain’s business cycle, with broad diversification in the early 1960s giving way to concentrated positions in banking and construction during the late-1960s, before shifting toward capital preservation amid the crisis of the 1970s. This research contributes to the understanding of modern portfolio management in emerging markets undergoing structural transition.</p>

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Foreign investment funds in Spain: performance and strategy in an emerging market (1961–1978)

  • 期刊论文

  • 发表日期：

    2026年7月14日

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  • Álvaro González-Bernardos,
  • Víctor M. Gómez-Blanco,
  • Águeda Gil-López,
  • Elena San Román

摘要

This paper reconstructs and examines the portfolios of 75 foreign investment funds (FIFs) active in the Spanish stock market between 1961 and 1978. Spain during this period offers a revealing case study, as the country transitioned from autarkic isolation toward progressive liberalisation and rapid economic growth, while remaining under the institutional constraints of the Franco regime. Drawing on a hand-collected panel dataset from the Boletín Financiero of the Barcelona Stock Exchange—encompassing over 4000 quarterly transactions and 153 securities— we evaluate investment returns, portfolio composition, concentration, and turnover across three distinct investment cycles. Applying the Direct Alpha method and asset-pricing models (CAPM, Henriksson- Merton, Fama-French three-factor), we find that FIFs consistently outperformed Spanish benchmarks, generating annualised abnormal returns of approximately 2.8-3.2% with market betas below unity. These abnormal returns—while potentially reflecting unobserved risks inherent in operating within an imperfect, opaque, and politically constrained market—stemmed not from systematic market timing but from selective stock picking and defensive portfolio structures. Investment strategies evolved alongside Spain’s business cycle, with broad diversification in the early 1960s giving way to concentrated positions in banking and construction during the late-1960s, before shifting toward capital preservation amid the crisis of the 1970s. This research contributes to the understanding of modern portfolio management in emerging markets undergoing structural transition.