Top management turnover: An examination of portfolio holdings and fund performance

Australian Graduate School of Management
Publication Type:
Journal Article
Australian Journal of Management, 2006, 31 (2), pp. 265 - 292
Issue Date:
Filename Description Size
Thumbnail2008005680OK.pdf997.95 kB
Adobe PDF
Full metadata record
We examine the performance and portfolio characteristics of actively managed equity funds impacted by top management turnover. Utilizing a unique database of monthly portfolio holdings, our study finds that, post-replacement, previously poor performing funds experience improved returns. However, this improved performance is not attributable to superior stock selection skill. We also find these new managers decrease the fund's reliance on momentum strategies and decrease the portfolio's concentration, which then leads to a reduced tracking-error volatility. Prior to the replacement event, underperforming investment managers exhibit preferences for larger, growth-oriented stocks, as well as riding momentum strategies and increasing portfolio turnover.
Please use this identifier to cite or link to this item: