Morningstar Ratings and Mutual Fund Manager Turnover

16 Pages Posted: 12 Nov 2015

See all articles by John Barron

John Barron

Purdue University - Department of Economics

Jinlan Ni

University of Nebraska at Omaha - College of Business Administration

Multiple version iconThere are 2 versions of this paper

Date Written: November 5, 2015

Abstract

This paper investigates the effect of Morningstar ratings on mutual fund manager replacement. We find that not only do Morningstar ratings affect the likelihood fund managers are replaced, but that Morningstar ratings are better predictors of manager replacement than alternative measures of fund performance. This finding is consistent with the finding that mutual fund investors respond to the Morningstar measure of performance. We also examine the changes in the management structure of funds that are made in conjunction with manager replacement in response to poor performance.

Suggested Citation

Barron, John M. and Ni, Jinlan, Morningstar Ratings and Mutual Fund Manager Turnover (November 5, 2015). Journal of Applied Finance (Formerly Financial Practice and Education), Vol. 23, No. 1, 2013. Available at SSRN: https://ssrn.com/abstract=2686747

John M. Barron (Contact Author)

Purdue University - Department of Economics ( email )

West Lafayette, IN 47907-1310
United States
765-494-4451 (Phone)
765-494-9658 (Fax)

Jinlan Ni

University of Nebraska at Omaha - College of Business Administration ( email )

60th & Dodge Streets
Omaha, NE 68182-0048
United States

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