Abstract
Using a large and long sample of US and European mutual funds, we examine the impact that membership of a fund family has on performance. We test for strategic and competitive behaviours among family funds and whether this affects performance persistence and risk-taking. While we do not find evidence of stronger performance persistence among family funds versus non-family funds, we do find some significant differences in the future performance of portfolios of family and non-family funds formed on the basis of past performance. We find strong evidence that a fund’s mid-year ranking within its family and within its sector affects its risk-taking over the remainder of the year. However, most interestingly, we find evidence to suggest differences in the ways in which the US and European fund management industries operate, although future microstructure research would be required to identify the industry practices and cultures that may be the source of these differences.
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