The aim of this study is investigation of investors’ reaction to intangible return and adjusting ro;e of institutional investors in Tehran Security Exchange. Intangible information is such as information about future profitably investment opportunity that get news about future firms’ performance, but may not to be measured by accounting digits or measures such as Book to Market ratio.

For this, using 197 firms’ data in time period of 2008 to 2012 and annual return information ended to 03/31, 06/31, 09/30 and 12/29, the hypothesis is investigated.

The results show that, over the 1-year horizon, with different lag period but with most focus in fourth and fifth months, totally, there is a significant negative relationship between intangible returns and future month returns.

Indeed, market often overreacts to intangible information, that is due overconfidence but during a 12 month period, the expectations were adjusted when new news is released. In addition, evidence show that firms with more institutional investors experience more reversal.