Abstract

http://ssrn.com/abstract=2032203
 
 

Citations (8)



 


 



Conflicting Family Values in Mutual Fund Families


Utpal Bhattacharya


Indiana University - Department of Finance

Jung Hoon Lee


A. B. Freeman School of Business at Tulane University - Department of Finance

Veronika Krepely Pool


Indiana University - Department of Finance

March 31, 2012

Journal of Finance, Forthcoming

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: April 2, 2012  

Suggested Citation

Bhattacharya , Utpal and Lee, Jung Hoon and Pool, Veronika Krepely, Conflicting Family Values in Mutual Fund Families (March 31, 2012). Journal of Finance, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2032203

Contact Information

Utpal Bhattacharya (Contact Author)
Indiana University - 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
A. B. Freeman School of Business at Tulane University - Department of Finance ( email )
Goldring/Woldenberg Hall
7 McAlister Drive, Tulane University
New Orleans, LA 70118
United States
Veronika Krepely Pool
Indiana University - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
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