Managerial Sharing, Mutual Fund Connections, and Performance

Augustiani, C; Casavecchia, L; Gray, J

Managerial Sharing, Mutual Fund Connections, and Performance

Augustiani, C Casavecchia, L

Gray, J

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Publication Type:: Journal Article
Citation:: International Review of Finance, 2015, 15 (3), pp. 427 - 455
Issue Date:: 2015-01-01

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Field	Value	Language
dc.contributor.author	Augustiani, C	en_US
dc.contributor.author	Casavecchia, L https://orcid.org/0000-0003-1452-3059	en_US
dc.contributor.author	Gray, J	en_US
dc.date.issued	2015-01-01	en_US
dc.identifier.citation	International Review of Finance, 2015, 15 (3), pp. 427 - 455	en_US
dc.identifier.issn	1369-412X	en_US
dc.identifier.uri	http://hdl.handle.net/10453/123464
dc.description.abstract	© 2015 International Review of Finance Ltd. In this study, we examine the effect of mutual fund connections, through managerial sharing, on performance and stock holding commonalities. Our analysis of return correlations and portfolio holdings indicates that more interconnected funds tend to buy and sell similar stocks, hence increasing the similarity of portfolio holdings and undermining the distinctiveness of their investment strategy. Our results also indicate that highly connected funds significantly underperform weakly connected funds by about 1.4% on a yearly risk-adjusted basis. We show that fund family performance is unaffected by the intensity of fund connections, and that greater fund connections could significantly enhance family-level profit margins.	en_US
dc.relation.ispartof	International Review of Finance	en_US
dc.relation.isbasedon	10.1111/irfi.12054	en_US
dc.title	Managerial Sharing, Mutual Fund Connections, and Performance	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	15	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1501 Accounting, Auditing and Accountability	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
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
utslib.copyright.status	closed_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	15	en_US

Abstract:

© 2015 International Review of Finance Ltd. In this study, we examine the effect of mutual fund connections, through managerial sharing, on performance and stock holding commonalities. Our analysis of return correlations and portfolio holdings indicates that more interconnected funds tend to buy and sell similar stocks, hence increasing the similarity of portfolio holdings and undermining the distinctiveness of their investment strategy. Our results also indicate that highly connected funds significantly underperform weakly connected funds by about 1.4% on a yearly risk-adjusted basis. We show that fund family performance is unaffected by the intensity of fund connections, and that greater fund connections could significantly enhance family-level profit margins.

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http://hdl.handle.net/10453/123464