Abstract

http://ssrn.com/abstract=1675503
 
 

References (36)



 
 

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Conflicting Family Values in Mutual Fund Families


Utpal Bhattacharya


Indiana University - Kelley School of Business - Department of Finance

Jung Hoon Lee


Tulane University - A.B. Freeman School of Business

Veronika Krepely Pool


Indiana University - Kelley School of Business - Department of Finance

March 31, 2012

Forthcoming: Journal of Finance

Abstract:     
We analyze the investment behavior of affiliated funds of mutual funds (AFoMFs), which are mutual funds that can only invest in other funds in the family, and are offered by most large families. Though never mentioned in any prospectus, we discover that AFoMFs provide an insurance pool against temporary liquidity shocks to other funds in the family. We show that though the family benefits because funds can avoid fire-sales, the cost of this insurance is borne by the investors in the AFoMFs. The paper thus uncovers some of the hidden complexities of fiduciary responsibility in mutual fund families.

Number of Pages in PDF File: 64

Keywords: mutual fund family, fund of funds, internal capital market, conflict of interest, fiduciary responsibility

JEL Classification: G23

Accepted Paper Series


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Date posted: September 12, 2010 ; Last revised: May 12, 2014

Suggested Citation

Bhattacharya , Utpal and Lee, Jung Hoon and Pool, Veronika Krepely, Conflicting Family Values in Mutual Fund Families (March 31, 2012). Forthcoming: Journal of Finance. Available at SSRN: http://ssrn.com/abstract=1675503 or http://dx.doi.org/10.2139/ssrn.1675503

Contact Information

Utpal Bhattacharya
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3413 (Phone)
812-855-5875 (Fax)
HOME PAGE: http://www.kelley.iu.edu/ubhattac/

Jung Hoon Lee
Tulane University - A.B. Freeman School of Business ( email )
7 McAlister Drive
New Orleans, LA 70118
United States
Veronika Krepely Pool (Contact Author)
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States

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