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

Gallagher, DR; Nadarajah, P; Pinnuck, M

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

Gallagher, DR Nadarajah, P Pinnuck, M

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Publisher:: Australian Graduate School of Management
Publication Type:: Journal Article
Citation:: Australian Journal of Management, 2006, 31 (2), pp. 265 - 292
Issue Date:: 2006-01

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Field	Value	Language
dc.contributor.author	Gallagher, DR	en_US
dc.contributor.author	Nadarajah, P	en_US
dc.contributor.author	Pinnuck, M	en_US
dc.date.issued	2006-01	en_US
dc.identifier.citation	Australian Journal of Management, 2006, 31 (2), pp. 265 - 292	en_US
dc.identifier.issn	0312-8962	en_US
dc.identifier.uri	http://hdl.handle.net/10453/10053
dc.description.abstract	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.	en_US
dc.publisher	Australian Graduate School of Management	en_US
dc.relation.ispartof	Australian Journal of Management	en_US
dc.title	Top management turnover: An examination of portfolio holdings and fund performance	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	31	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	15 Commerce, Management, Tourism and Services	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access
pubs.consider-herdc	false	en_US
pubs.issue	2	en_US
pubs.volume	31	en_US

Abstract:

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.

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http://hdl.handle.net/10453/10053