Are active fund managers colectors of private information or fast interpreters of public information?

Gallagher, DR; Looi, A; Pinnuck, M

Are active fund managers colectors of private information or fast interpreters of public information?

Gallagher, DR Looi, A Pinnuck, M

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Publisher:: Blackwell Publishing
Publication Type:: Journal Article
Citation:: Accounting and Finance, 2010, 50 (3), pp. 635 - 662
Issue Date:: 2010-01

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Field	Value	Language
dc.contributor.author	Gallagher, DR	en_US
dc.contributor.author	Looi, A	en_US
dc.contributor.author	Pinnuck, M	en_US
dc.date.issued	2010-01	en_US
dc.identifier.citation	Accounting and Finance, 2010, 50 (3), pp. 635 - 662	en_US
dc.identifier.issn	0810-5391	en_US
dc.identifier.uri	http://hdl.handle.net/10453/14011
dc.description.abstract	Recent studies of fund manager performance find evidence of outperformance. However limited research exists as to whether such outperformance is because of privately collected information, or merely expedient interpretation of publicly released information. In this study, we examine the trade sequences of active Australian equity fund managers around earnings announcements to provide insights into the source of fund managers superior information. We document an increased occurrence of buy-sell trade sequences around good-news earnings announcements. The evidence is consistent with fund managers having both private information about forthcoming good-news earnings announcements and being `short-term profiteers. We find no evidence that fund managers have private information about forthcoming bad-news earnings announcements. However, we do find an increase in the frequency of fund managers not trading before bad-news earnings announcements only to subsequently sell during announcements.	en_US
dc.publisher	Blackwell Publishing	en_US
dc.relation.ispartof	Accounting and Finance	en_US
dc.relation.isbasedon	10.1111/j.1467-629X.2010.00341.x	en_US
dc.subject.classification	Accounting	en_US
dc.title	Are active fund managers colectors of private information or fast interpreters of public information?	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	50	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	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
utslib.copyright.status	closed_access
pubs.consider-herdc	true	en_US
pubs.issue	3	en_US
pubs.volume	50	en_US

Abstract:

Recent studies of fund manager performance find evidence of outperformance. However limited research exists as to whether such outperformance is because of privately collected information, or merely expedient interpretation of publicly released information. In this study, we examine the trade sequences of active Australian equity fund managers around earnings announcements to provide insights into the source of fund managers superior information. We document an increased occurrence of buy-sell trade sequences around good-news earnings announcements. The evidence is consistent with fund managers having both private information about forthcoming good-news earnings announcements and being `short-term profiteers. We find no evidence that fund managers have private information about forthcoming bad-news earnings announcements. However, we do find an increase in the frequency of fund managers not trading before bad-news earnings announcements only to subsequently sell during announcements.

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http://hdl.handle.net/10453/14011