State-Controlled Mutual Funds
Posted: 18 Dec 2024
Date Written: November 06, 2024
Abstract
In this paper, we provide the first comprehensive study of state-controlled (SC) mutual funds. Relative to non-SC funds, we find that SC funds significantly overweight stocks in sectors covered by China's major industrial policies. This is especially true for SC funds that are more connected to the central government. Such overweighting results in worse fund performance and more institutional outflows. Our results suggest that SC funds are used to support strategically important sectors, which is a nonpecuniary consideration.
Suggested Citation: Suggested Citation
Li, Siyang and Li, Tao and Zhang, Xiaoyan and Zhu, Yite, State-Controlled Mutual Funds (November 06, 2024). Available at SSRN: https://ssrn.com/abstract=5017682
European Corporate Governance Institute (ECGI) ( email )
c/o the Royal Academies of Belgium
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Belgium
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