Horses for Courses: Fund Managers and Organizational Structures
59 Pages Posted: 4 Mar 2008
There are 3 versions of this paper
Horses for Courses: Fund Managers and Organizational Structures
Horses for Courses: Fund Managers and Organizational Structures
Date Written: January 22, 2008
Abstract
This paper considers the team management of mutual funds, fund manager ability, fund performance, and holdings. We find evidence suggesting a positive relation between fund performance and team management concurrent with a negative relation between managerial ability and the use of team management. Consistent with the notion that team management suppresses portfolio eccentricity and leads to more generic trading strategies, thereby both increasing returns and making returns less informative of fund manager ability, we also find that team management is associated with less idiosyncratic portfolio holdings and a greater loading on large capitalization, low book-to-market, and momentum stocks.
Keywords: Team Management, Fund Performance, Self Selection
JEL Classification: G29
Suggested Citation: Suggested Citation
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