What a Difference a Ph.D. Makes: More than Three Little Letters
Michigan State University, Department of Finance
Joshua Matthew Pollet
University of Illinois at Urbana-Champaign - Department of Finance
Indiana University Bloomington - Department of Finance
October 15, 2013
Several hundred individuals who hold a Ph.D. in economics, finance, or others fields work for institutional money management companies. The gross performance of domestic equity investment products managed by individuals with a Ph.D. (Ph.D. products) is superior to the performance of non-Ph.D. products matched by objective, size, and past performance for one-year returns, Sharpe Ratios, alphas, information ratios, and the manipulation-proof measure MPPM. Fees for Ph.D. products are lower than those for non-Ph.D. products. Investment flows to Ph.D. products substantially exceed the flows to the matched non-Ph.D. products. Ph.D.s’ publications in leading economics and finance journals further enhance the performance gap.
Number of Pages in PDF File: 46
Keywords: Ph.D., institutional money management, publications
JEL Classification: G23, G14, J41working papers series
Date posted: October 25, 2013
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