The Performance of Local versus Foreign Mutual Fund Managers

19 Pages Posted: 15 Aug 2007

See all articles by Rogér Otten

Rogér Otten

Maastricht University - Limburg Institute of Financial Economics (LIFE)

Dennis Bams

University of Maastricht - Limburg Institute of Financial Economics (LIFE)

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Abstract

In this paper we examine the performance of US equity funds (locals) versus UK equity funds (foreigners) also investing in the US equity market. Based on informational disadvantages one would expect the UK funds to under-perform the US funds, especially in the research-intensive small company market. After controlling for tax treatment, fund objectives, investment style and time-variation in betas, we do not find evidence for this. In the small company segment we even find a slight out-performance for UK funds compared to US funds. Finally we observe a home bias in the UK portfolios, which is partly attributable to UK funds investing in cross-listed stocks in the USA.

Suggested Citation

Otten, Rogér and Bams, Dennis, The Performance of Local versus Foreign Mutual Fund Managers. European Financial Management, Vol. 13, No. 4, pp. 702-720, September 2007. Available at SSRN: https://ssrn.com/abstract=1006912 or http://dx.doi.org/10.1111/j.1468-036X.2007.00379.x

Rogér Otten (Contact Author)

Maastricht University - Limburg Institute of Financial Economics (LIFE) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 388 3838 (Phone)
+31 43 388 4875 (Fax)

HOME PAGE: http://www.fdewb.unimaas.nl/finance/faculty/Otten

Dennis Bams

University of Maastricht - Limburg Institute of Financial Economics (LIFE) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 388 3838 (Phone)
+31 43 325 8530 (Fax)

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