Performance Persistence and the Characteristics of Mutual Fund Managers: Are Some Better than Others?

Abstract

The primary aim of this study is to determine whether mutual fund performance is related to either prior returns or the characteristics of fund managers. In particular, we account for the changes in fund managers, an issue largely ignored in the majority of the prior related studies. Our results reveal that female managers with Master's degrees have higher excess returns, with such superiority not being adequately explained by common factors, management fees or transaction costs. Furthermore, fund managers gained their Master's degrees from domestic institutes perform better than fund managers obtained their Master's degrees from foreign institutes. We also find that whilst persistence in mutual fund performance did exist in an earlier time period, it has subsequently disappeared, even condition on female managers or managers with Master's degrees.