Industry Allocation of Equity Funds
28 Pages Posted: 22 Aug 2014
Date Written: August 21, 2014
Industry allocation preferences of equity fund managers are examined to identify how style investing from industry-dimensions influence fund performance and flows. Using Australian equity fund data, we show that the level of Industry Activeness, Industry Rotation and Industry Rotation Sensitivity, which are three market-relative industry allocation metrices, significantly affect both the performance and flows of retail and wholesale equity funds. These findings illustrate the significance of industry allocations in the role of style investing.
Keywords: Industry allocation, Fund flows, Fund performance, Style investing
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