The Exclusive Role of Centralized Fund Family Management

Journal of Financial Services Research, Forthcoming

43 Pages Posted: 8 May 2019 Last revised: 11 May 2019

See all articles by David L. Hunter

David L. Hunter

University of Queensland

Jennifer Sun

University of Queensland - Finance

Karen L. Benson

University of Queensland - Business School; Financial Research Network (FIRN)

Date Written: May 7, 2019

Abstract

Fund families are centrally managed, and can directly control resource allocations between funds. We quantify multiple manageable fund family attributes, and examine their combined effects upon returns and investor flows. We focus upon five attributes that are exclusively manageable by fund families: marginal fee economies of scale, star fund offerings, mixed high and low risk product offerings, within-family manager scope, and manager outsourcing. We find sensitivity differences during financial crisis and non-crisis time periods. Management of these exclusive attributes significantly improve a fund family’s returns and investor flows, benefiting fund families and their investors during both normal and financial crisis periods. We find that investors reward fund families with greater performance sensitive inflows and weaker performance sensitive outflows, indicating that investors identify greater utility in centrally managed fund families.

Keywords: mutual funds, investment performance, non-bank financial institutions

JEL Classification: G23

Suggested Citation

Hunter, David L. and Sun, Jennifer and Benson, Karen L., The Exclusive Role of Centralized Fund Family Management (May 7, 2019). Journal of Financial Services Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3363199 or http://dx.doi.org/10.2139/ssrn.3363199

David L. Hunter (Contact Author)

University of Queensland ( email )

United States
733468094 (Phone)

HOME PAGE: http://https://www.business.uq.edu.au/staff/david-hunter

Jennifer Sun

University of Queensland - Finance ( email )

United States

Karen L. Benson

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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