Mutual Fund Managers’ Prior Work Experience and Their Investment Skills
Forthcoming in Financial Management
34 Pages Posted: 28 Sep 2017
Date Written: July 6, 2016
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
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