Mutual Fund Managers’ Prior Work Experience and Their Investment Skills

Forthcoming in Financial Management

34 Pages Posted: 28 Sep 2017

See all articles by Rui Chen

Rui Chen

Central University of Finance and Economics (CUFE)

Min Zhu

University of Queensland

Date Written: July 6, 2016

Abstract

This paper examines the relationship between mutual fund managers’ past professional backgrounds and their portfolio performance, using Chinese mutual fund data from 2003 to 2016. We focus on managers with prior work experience either as industry analysts or as macro analysts, the two most common career paths for Chinese fund managers. We hypothesize that managers who worked as industry analysts exhibit superior stock-picking skills, while managers with a background as macro analysts are more skillful in timing the market. These hypotheses are supported by the data, even after controlling for observable fund and manager characteristics. Bootstrap analyses suggest that the significant difference in performance between these two types of managers cannot be attributed purely to luck.

Keywords: Managerial skills, stock-picking, market-timing, bootstrap

JEL Classification: G11, G12, G19, G23, J24

Suggested Citation

Chen, Rui and Zhu, Min, Mutual Fund Managers’ Prior Work Experience and Their Investment Skills (July 6, 2016). Forthcoming in Financial Management, Available at SSRN: https://ssrn.com/abstract=3043574

Rui Chen

Central University of Finance and Economics (CUFE) ( email )

39 South College Road
Haidian District
Beijing, Beijing 100081
China

Min Zhu (Contact Author)

University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

HOME PAGE: http://https://www.business.uq.edu.au/staff/min-zhu

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
76
Abstract Views
422
rank
348,956
PlumX Metrics