The Performance of Local Versus Foreign Mutual Fund Managers

26 Pages Posted: 19 May 2003

See all articles by Rogér Otten

Rogér Otten

Maastricht University - Limburg Institute of Financial Economics (LIFE)

Dennis Bams

University of Maastricht - Limburg Institute of Financial Economics (LIFE)

Multiple version iconThere are 2 versions of this paper

Date Written: January 13, 2003

Abstract

In this paper we examine the performance of local US equity funds versus foreign UK funds also investing in the US equity market. Based on informational disadvantages one would expect the foreign funds to under-perform the local funds, especially in the research intensive small company market. After controlling for tax treatment, fund objectives, investment style and time-variation in betas, we do not find evidence for this.

In the small company segment we even find a slight out-performance for foreign funds compared to local funds. In addition to that we observe a home bias in the UK portfolios, which could not be explained by currency effects or other non-US equity holdings.

Keywords: Mutual Funds, Home Bias, Information asymmetry, Performance evaluation

JEL Classification: G12, G20, G23

Suggested Citation

Otten, Rogér and Bams, Dennis, The Performance of Local Versus Foreign Mutual Fund Managers (January 13, 2003). EFMA 2003 Helsinki Meetings. Available at SSRN: https://ssrn.com/abstract=392586 or http://dx.doi.org/10.2139/ssrn.392586

Rogér Otten (Contact Author)

Maastricht University - Limburg Institute of Financial Economics (LIFE) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 388 3838 (Phone)
+31 43 388 4875 (Fax)

HOME PAGE: http://www.fdewb.unimaas.nl/finance/faculty/Otten

Dennis Bams

University of Maastricht - Limburg Institute of Financial Economics (LIFE) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 388 3838 (Phone)
+31 43 325 8530 (Fax)

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