A Study of Analyst-Run Mutual Funds: The Abilities and Roles of Buy-Side Analysts
College of William and Mary - Mason School of Business
Claire M. Rosenfeld
College of William and Mary - Finance
April 28, 2014
We analyze mutual funds managed by buy-side analysts from fourteen fund families to study the abilities and role of buy-side analysts. Buy-side analysts exhibit investment abilities by realizing positive risk-adjusted returns. Analysts’ strong investment abilities positively impact the performance of funds from the same family. Although some managers benefit from closely following their buy-side analysts’ ideas, research generated by buy-side analysts is generally being underutilized by affiliated managers, whose funds underperform funds managed by in-house analysts. The underutilization is consistent with entrenched managers choosing to forgo some of the analysts’ ideas due to career considerations.
Number of Pages in PDF File: 47
Keywords: Mutual Funds, Portfolio Managers, Buy-Side Analysts, Performance Evaluation, Asset Management, Entrenchment
JEL Classification: G10, G20, G23, G29working papers series
Date posted: September 16, 2012 ; Last revised: April 29, 2014
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