A Tale of Two Types: Generalists vs. Specialists in Asset Management

59 Pages Posted: 26 Oct 2015 Last revised: 29 Apr 2021

See all articles by Rafael Zambrana

Rafael Zambrana

University of Notre Dame - Mendoza College of Business

Fernando Zapatero

Questrom School of Business, Boston University

Date Written: November 1, 2020

Abstract

Management companies assign some portfolio managers to run funds within a single investment objective (i.e., specialists), and others to run funds across several investment objectives (i.e., generalists). Our results show that funds achieve higher performance when they appoint superior pickers as specialists and market timers as generalists. We argue that these decisions are the result of a better match of manager mandates with the way information is collected and processed in each investment strategy. Overall our results are consistent with decision-making in fund families that add value to their investors by aiming to optimally assign or reassign portfolio managers.

Keywords: Mutual fund, Institutional investors, Human capital, Specialist, Generalist, Market timing, Stock picking.

JEL Classification: G20, G23, J24, L25, M51, M54

Suggested Citation

Zambrana, Rafael and Zapatero, Fernando, A Tale of Two Types: Generalists vs. Specialists in Asset Management (November 1, 2020). Journal of Financial Economics (JFE), Forthcoming, Available at SSRN: https://ssrn.com/abstract=2672858 or http://dx.doi.org/10.2139/ssrn.2672858

Rafael Zambrana (Contact Author)

University of Notre Dame - Mendoza College of Business ( email )

Notre Dame, IN 46556-5646
United States

Fernando Zapatero

Questrom School of Business, Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-353-3631 (Phone)

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