Speed of Information Diffusion within Fund Families

45 Pages Posted: 19 Feb 2015 Last revised: 17 Sep 2016

See all articles by Gjergji Cici

Gjergji Cici

University of Kansas - School of Business

Stefan Jaspersen

University of Cologne - Centre for Financial Research (CFR); University of Cologne - Department of Finance

Alexander Kempf

University of Cologne - Department of Finance & Centre for Financial Research (CFR)

Multiple version iconThere are 2 versions of this paper

Date Written: July 21, 2015

Abstract

We document that the speed of information dissemination within mutual fund families positively affects the performance of member funds. This suggests that the resulting benefits of higher information precision far outweigh free-riding costs associated with fast internal dissemination. The performance effect intensifies when information travels across managers from different rather than same styles. This is consistent with fast information diffusion aggregating complementary insights that sharpen information precision, but also with fewer free-riding opportunities among managers from different styles. Managers exploit the resulting higher information precision rationally by trading more, relying less on public information, and investing differently from unaffiliated peers.

Keywords: Information diffusion, mutual fund performance, fund families, investment behavior, organizational structures

JEL Classification: D23, D830, G23, L22

Suggested Citation

Cici, Gjergji and Jaspersen, Stefan and Kempf, Alexander, Speed of Information Diffusion within Fund Families (July 21, 2015). Available at SSRN: https://ssrn.com/abstract=2565753 or http://dx.doi.org/10.2139/ssrn.2565753

Gjergji Cici (Contact Author)

University of Kansas - School of Business ( email )

Capitol Federal Hall
1654 Naismith Drive
Lawrence, KS 66045
United States
785-864-3873 (Phone)

HOME PAGE: http://business.ku.edu/gjergji-cici

Stefan Jaspersen

University of Cologne - Centre for Financial Research (CFR) ( email )

Albertus-Magnus Platz
Cologne, 50923
Germany

University of Cologne - Department of Finance ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Alexander Kempf

University of Cologne - Department of Finance & Centre for Financial Research (CFR) ( email )

Cologne, 50923
Germany
+49 221 470 2714 (Phone)
+49 221 470 3992 (Fax)

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