You’re Fired! New Evidence on Portfolio Manager Turnover and Performance

2015 ◽  
Vol 50 (4) ◽  
pp. 729-755 ◽  
Author(s):  
Leonard Kostovetsky ◽  
Jerold B. Warner
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Previous Literature ◽  
Fund Management ◽  
Management Performance ◽  
Managerial Turnover ◽  
Portfolio Manager ◽  
And Performance ◽  
New Evidence ◽  
Manager Turnover

AbstractWe study managerial turnover for both internally managed mutual funds and those managed externally by subadvisors. We argue that turnover of subadvisors provides sharper tests and helps address several unresolved issues and puzzles from the previous literature. We find dramatically stronger inverse relations between subadvisor departures and lagged returns, and new evidence on how past flow predicts turnover. We find no evidence of improvements in return performance related to departures, but flow improvements are associated with departures of poor past performers. Our findings represent new evidence on how investors, sponsors, and boards learn about and evaluate mutual fund management performance.

A Study on the Performance of Indian Mutual Funds in Recent Years

2021 ◽  
pp. 428-444
Author(s):  
Dipika Varshney ◽  
Sowjanya Heblikar ◽  
Sunitha B K
Keyword(s):  
Mutual Funds ◽  
Empirical Research ◽  
Mutual Fund ◽  
Financial Industry ◽  
Indian Economy ◽  
Cause And Effect ◽  
Fund Industry ◽  
Mutual Fund Industry ◽  
And Performance

The Indian mutual fund industry is an integral part of the Indian financial industry. The mutual fund industry has a significant impact on the Indian economy. This study aims at understanding the growth and performance of mutual fund industry and understanding the cause and effect through empirical research. For this research, published papers have been studied and analysed to give a better understanding of the industry. This study records the performance of Indian mutual funds from the year 2015-2020. It analyses the performance of the debt, equity, and ETF mutual funds. The challenges are huge, but the investors have shown a matured behaviour. The 2020 pandemic has allowed investors to balance their portfolios by removing poor performing mutual fund holdings.

scholarly journals Cash management and performance of index mutual funds

2020 ◽  
Vol 33 (3/4) ◽  
pp. 549-565
Author(s):  
Diego Víctor de Mingo-López ◽  
Juan Carlos Matallín-Sáez ◽  
Amparo Soler-Domínguez
Keyword(s):  
Stock Market ◽  
Mutual Funds ◽  
Mutual Fund ◽  
Fund Performance ◽  
Cash Management ◽  
Stock Market Index ◽  
Index Funds ◽  
Content Type ◽  
Market Index ◽  
And Performance

PurposeThis study aims to assess the relationship between cash management and fund performance in index fund portfolios.Design/methodology/approachUsing a sample of 104 index mutual funds that track the Standard and Poor 500 stock market index from January 1999 to December 2016, the authors employ quintile portfolios and different regression models to assess the differences in risk-adjusted monthly returns experienced by index funds managing different cash levels in their portfolios. To ensure the robustness of the results, different sub-periods and market states are considered in the analyses as well as other exogenous factors and fund characteristics affecting the level of portfolio cash holdings and index fund performance.FindingsResults show that index funds holding higher levels of cash and cash equivalents performed significantly worse than their low-cash counterparts. This evidence remains even after considering different sub-periods and bullish and bearish market conditions and controlling for fund expenses and other variables that could drive this cash-performance relationship.Originality/valueThis study expands the extant literature analyzing cash management in the mutual fund industry. More specifically, the analyses focus on index fund portfolios that replicate a specific benchmark, given that their performance differences should not be related to the market evolution but to the factors derived from the fund management and other exogenous issues. These findings are of interest to managers and investors willing to improve their risk-adjusted returns while investing as diversified as a stock market index.

Manipulation and performance persistence: an examination of Iranian equity mutual fund performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahsa Hosseini ◽  
Mohammad Khodaei Valahzaghard ◽  
Ali Saeedi
Keyword(s):  
Mutual Funds ◽  
Performance Measures ◽  
Mutual Fund ◽  
Performance Measure ◽  
Performance Persistence ◽  
Content Type ◽  
Lower Tertile ◽  
Time Horizons ◽  
Equity Mutual Funds ◽  
And Performance

Purpose This paper aims to study manipulation and performance persistence in equity mutual funds. To this end, Manipulation-Proof Performance Measure (MPPM) and Doubt Ratio, along with a number of current performance measures are used to evaluate the performance of equity mutual funds in Iran. Design/methodology/approach The authors investigate performance manipulation by 1) comparing the results of the MPPM with the current performance measures, 2) checking the Doubt Ratio to detect suspicious funds. Additionally, the authors investigate performance persistence by forming and evaluating portfolios of the equity mutual funds at several time horizons. Findings The authors conclude that there is no evidence of performance manipulation in the equity mutual funds. Additionally, when comparing the performance of the upper (top) tertile portfolios and the lower tertile portfolios, in all of the studied 1, 3, 6 and 12-month horizons, the authors find performance persistence in the equity mutual funds. Originality/value To the best of the authors’ knowledge, this research is the first study to investigate the performance manipulation in the Iranian equity mutual funds, and also is the first study in Iran that uses the MPPM and the Doubt Ratio in addition to a number of current performance measures to investigate the performance persistence in the equity mutual funds at several time horizons.

scholarly journals Outsourcing Mutual Fund Management: Firm Boundaries, Incentives, and Performance

2013 ◽  
Vol 68 (2) ◽  
pp. 523-558 ◽  
Author(s):  
JOSEPH CHEN ◽  
HARRISON HONG ◽  
WENXI JIANG ◽  
JEFFREY D. KUBIK
Keyword(s):  
Mutual Fund ◽  
Firm Boundaries ◽  
Fund Management ◽  
And Performance

scholarly journals Funds Manager and Mutual Funds Characteristics on Mutual Funds Performance: Empirical Evidence of Equity Mutual Funds in Indonesia

2020 ◽  
Vol 11 (2) ◽  
pp. 77
Author(s):  
Rina Rachmawati ◽  
Sugeng Wahyudi ◽  
Irene Rini Demi Pangestuti ◽  
Najmudin .
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Linear Models ◽  
Market Timing ◽  
Investment Strategy ◽  
Investment Fund ◽  
Fund Management ◽  
Fund Managers ◽  
Equity Funds ◽  
Positive Effect

This study examines the effect of investment fund managers' characteristics in the form of tenure, and mutual fund characteristics with proxy turnover portfolios, market timing and stock selectivity on the performance of stock mutual funds. The research sample is 27 stock mutual funds in Indonesia that were active from 2013 to 2017. On the analysis of the relationships between the characteristics of investment managers and mutual funds characteristics on the performance of stock mutual funds, a series of OLS regressions were run. The panel data regression was included based on using the Eviews. All of the above were aimed at achieving portfolio optimization and realizing the maximization of the interests for fund management companies and investors. The main findings are as follows. Tenure does not affect the performance of stock mutual funds during the years 2013 to 2017, but if divided into 2 quadrants of tenure, namely tenure over 19 years and tenure under 19 years of work, the result is that tenure over 19 years has a positive effect on the performance of stock mutual funds, but tenure brought 19 years has no effect on the performance of equity funds, whereas mutual funds characteristics, which are proxied by portfolio turnover, market timing and stock selectivity, have a significant positive effect on the performance of equity funds in Indonesia. The primary limitation in the scope is the sample, because stock mutual funds that publish consistently Financial statements between 2013 and 2017 are few in number. These findings have important implications for fund management companies as input material that the investment strategy of the investment management team affects the performance of equity funds compared to the characteristics of investment managers with proxies for years of service. This paper proposes a new perspective to evaluate the relationship between the fund manager and mutual funds characteristicsanddivide 2 groups of working years, and calculate them with non-linear models.

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