Industry Concentration and Mutual Fund Performance
Journal of Investment Management, Vol. 5, No. 1, First Quarter 2007
Posted: 28 Mar 2007
We study the relation between the industry concentration and the performance of actively managed U.S. mutual funds from 1984 to 2003. Our results indicate that the most concentrated funds perform better after controlling for risk and style differences using factor-based performance measures. This finding suggests that investment ability is more evident among managers who hold portfolios concentrated in a few industries.
Keywords: Industry concentration, mutual fund performance, active portfolio management
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