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http://ssrn.com/abstract=1906798
 
 

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Family Values and the Star Phenomenon: Strategies of Mutual Fund Families


Vikram K. Nanda


Georgia Institute of Technology - College of Management

Zhi Jay Wang


University of Oregon - Charles H. Lundquist School of Business

Lu Zheng


University of California, Irvine - Paul Merage School of Business

July 2003


Abstract:     
We examine the extent to which a fund’s cash flows are affected by the stellar performance of other funds in its family - and consequences of such spillovers. We show that star performance results in greater cash inflow to the fund and to other funds in its family. Moreover, families with higher variation in investment strategies across funds are shown to be more likely to generate star performance. We argue that spillovers may induce lower ability families to pursue star creating strategies. Consistent with our conjecture, families with high variation in investment strategies across funds significantly underperform low variation families.

Number of Pages in PDF File: 46

Keywords: Mutual Fund Families, Fund Flows, Performance

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Date posted: August 10, 2011  

Suggested Citation

Nanda, Vikram K. and Wang, Zhi Jay and Zheng, Lu, Family Values and the Star Phenomenon: Strategies of Mutual Fund Families (July 2003). Available at SSRN: http://ssrn.com/abstract=1906798 or http://dx.doi.org/10.2139/ssrn.1906798

Contact Information

Vikram K. Nanda
Georgia Institute of Technology - College of Management ( email )
800 West Peachtree St., NW
Atlanta, GA 30308-1149
United States
404-385-8156 (Phone)
Zhi Jay Wang (Contact Author)
University of Oregon - Charles H. Lundquist School of Business ( email )
1208 University of Oregon
Eugene, OR 97403-1208
United States
Lu Zheng
University of California, Irvine - Paul Merage School of Business ( email )
Irvine, CA California 92697-3125
United States
9498248365 (Phone)
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