Jack of all trades versus specialists: Fund family specialization and mutual fund performance

Casavecchia, L; Ge, C

Jack of all trades versus specialists: Fund family specialization and mutual fund performance

Casavecchia, L

Ge, C

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Publication Type:: Journal Article
Citation:: International Review of Financial Analysis, 2019, 63 pp. 69 - 85
Issue Date:: 2019-05-01

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Field	Value	Language
dc.contributor.author	Casavecchia, L https://orcid.org/0000-0003-1452-3059	en_US
dc.contributor.author	Ge, C	en_US
dc.date.issued	2019-05-01	en_US
dc.identifier.citation	International Review of Financial Analysis, 2019, 63 pp. 69 - 85	en_US
dc.identifier.issn	1057-5219	en_US
dc.identifier.uri	http://hdl.handle.net/10453/132221
dc.description.abstract	© 2019 This study is the first to explore the impact of specialization decisions by a fund family, as reflected by its asset-based concentration in the active management segment (ACF), on the performance of its equity mutual funds. We find that active funds of fund families with higher ACF enjoy superior performance and greater investor capital allocation. Importantly, funds of fund families with higher ACF exhibit greater reliance on private information production, a clear signal of managerial skill. Our findings are not explained by heterogeneity in total ownership costs and outsourcing arrangements of the fund family. By exploiting a quasi-experiment involving fund families’ sponsorship acquisition events, we show that fund performance deteriorates markedly when the acquiring fund family has lower ACF than the selling fund family. Last, we show that funds affiliated to fund families with higher ACF enjoy significant institutional advantages from better family-level allocation of resources to information production.	en_US
dc.relation.ispartof	International Review of Financial Analysis	en_US
dc.relation.isbasedon	10.1016/j.irfa.2019.01.013	en_US
dc.subject.classification	Finance	en_US
dc.title	Jack of all trades versus specialists: Fund family specialization and mutual fund performance	en_US
dc.type	Journal Article
utslib.citation.volume	63	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1801 Law	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.publication-status	Published	en_US
pubs.volume	63	en_US

Abstract:

© 2019 This study is the first to explore the impact of specialization decisions by a fund family, as reflected by its asset-based concentration in the active management segment (ACF), on the performance of its equity mutual funds. We find that active funds of fund families with higher ACF enjoy superior performance and greater investor capital allocation. Importantly, funds of fund families with higher ACF exhibit greater reliance on private information production, a clear signal of managerial skill. Our findings are not explained by heterogeneity in total ownership costs and outsourcing arrangements of the fund family. By exploiting a quasi-experiment involving fund families’ sponsorship acquisition events, we show that fund performance deteriorates markedly when the acquiring fund family has lower ACF than the selling fund family. Last, we show that funds affiliated to fund families with higher ACF enjoy significant institutional advantages from better family-level allocation of resources to information production.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/132221