Managerial Multitasking in the Mutual Fund Industry

41 Pages Posted: 16 Aug 2011 Last revised: 25 Apr 2018

Vikas Agarwal

Georgia State University; University of Cologne - Centre for Financial Research (CFR)

Linlin Ma

Northeastern University

Kevin Mullally

University of Alabama

Date Written: March 2018

Abstract

Mutual fund companies frequently assign multiple funds to one portfolio manager. This study examines the consequences of such “multitasking” arrangements. We find that, despite fund companies choosing more qualified managers to run multiple funds, multitasking is associated with underperformance relative to single-tasking funds. We attribute this finding to greater distraction of managers since underperformance is more pronounced when managers are responsible for more funds or strategies. Further supporting the distraction hypothesis, multitasking managers devote less effort to their funds. Despite this underperformance, multitasking arrangements benefit fund companies as they initially attract greater capital flows and help to retain portfolio managers.

Keywords: Mutual Fund, Fund Manager, Multitasking, Fund Performance, Agency Problems

JEL Classification: G10, G20, G23

Suggested Citation

Agarwal, Vikas and Ma, Linlin and Mullally, Kevin, Managerial Multitasking in the Mutual Fund Industry (March 2018). Available at SSRN: https://ssrn.com/abstract=1910367 or http://dx.doi.org/10.2139/ssrn.1910367

Vikas Agarwal

Georgia State University ( email )

35 Broad Street,
Suite 1221
Atlanta, GA 30303-3083
United States
404-413-7326 (Phone)
404-413-7312 (Fax)

HOME PAGE: http://www.gsu.edu/~fncvaa

University of Cologne - Centre for Financial Research (CFR)

Albertus-Magnus Platz
Cologne, 50923
Germany

Linlin Ma (Contact Author)

Northeastern University ( email )

Boston, MA 02115
United States
617-373-4569 (Phone)

Kevin Mullally

University of Alabama ( email )

235 Alston Hall
Box 870224
Tuscaloosa, AL 35487
United States
205-348-7858 (Phone)

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