Does Institutional Ownership Predict Mutual Fund Performance? An Examination of Undiscovered Holdings within 13(F) Reports

37 Pages Posted: 19 May 2020

See all articles by Xuhui (Nick) Pan

Xuhui (Nick) Pan

University of Oklahoma

Kainan Wang

University of Toledo

Blerina Bela Zykaj

Clemson University

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Date Written: November 2019

Abstract

We show that institutional ownership in equity mutual funds predicts fund performance. Our measure of institutional ownership in mutual funds is directly from institutions’ quarterly 13(f) filings so it provides a broader coverage of institutional investment in mutual funds than existing studies. Most institutions holding mutual funds are independent investment advisors and bank trusts who invest in mutual funds on behalf of their clients. Our results show that funds held by institutions perform better than funds not held by institutions for at least 3 years. Institutions’ informational advantage is the main driver of the outperformance of institution‐held funds.

Keywords: 13(f) filings, institutional investors, mutual‐fund performance, mutual funds

Suggested Citation

Pan, Xuhui (Nick) and Wang, Kainan and Zykaj, Blerina Bela, Does Institutional Ownership Predict Mutual Fund Performance? An Examination of Undiscovered Holdings within 13(F) Reports (November 2019). European Financial Management, Vol. 25, Issue 5, pp. 1249-1285, 2019. Available at SSRN: https://ssrn.com/abstract=3600280 or http://dx.doi.org/10.1111/eufm.12209

Xuhui (Nick) Pan (Contact Author)

University of Oklahoma ( email )

307 W Brooks
Norman, OK 73019
United States

Kainan Wang

University of Toledo ( email )

Department of Finance
Mail Stop 103
Toledo, OH 43606
United States

Blerina Bela Zykaj

Clemson University ( email )

101 Sikes Ave
Clemson, SC 29634
United States

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