Tournaments in Mutual Fund Families

Kempf, Alexander; Ruenzi, Stefan

doi:10.2139/ssrn.322421

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Tournaments in Mutual Fund Families

36 Pages Posted: 1 Sep 2003

See all articles by Alexander Kempf

Alexander Kempf

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

Stefan Ruenzi

University of Mannheim - Department of International Finance

There are 2 versions of this paper

Date Written: March 2005

Abstract

In this paper we examine intra-firm competition in the U.S. mutual fund industry. Our empirical study shows that fund managers within mutual fund families compete against other fund managers within the same fund family. They adjust the risk they take dependent on the relative position within their fund family. The direction of the adjustment crucially hinges on the competitive situation within a family. Funds from small families behave in the opposite way than funds from large families. The results are very robust. They hold for different time periods and for different subgroups of funds.

Keywords: Intra-Firm Competition, Mutual Funds, Risk-Taking, Rank-Order Tournaments, Family Tournament

JEL Classification: D81, G20, G23, J33

Suggested Citation: Suggested Citation

Kempf, Alexander and Ruenzi, Stefan, Tournaments in Mutual Fund Families (March 2005). Available at SSRN: https://ssrn.com/abstract=322421 or http://dx.doi.org/10.2139/ssrn.322421