Mutual Fund Managers Research Articles

What drives diversity hiring in the mutual fund management industry?

Although labor force racial diversity has improved significantly over past decades, minorities remain underrepresented in finance. A lack of racial diversity is particularly worrisome in prestigious occupations. This paper examines diversity hiring in the mutual fund industry from 1991 to 2019. Our results reveal that minority managers are more likely to have attended top schools and have quantitative backgrounds. We find strong and persistent evidence that large and racially diverse funds are more likely to hire minority managers. We suggest that minority managers pursue higher levels of credentials to overcome in-group bias and homophily in the mutual fund industry.

Institutional investor networks and firm innovation: Evidence from China

We examine the impact of institutional investor networks on firm innovation in China. Employing the unexpected departure of mutual fund managers and the inclusion of the Shanghai-Shenzhen 300 index as identifications, we find that institutional investor networks have a positive impact on firm innovation. Specifically, firms that are hold by well-connected institutional investors are motivated to make R&D investments and receive greater patents than their counterparts. This positive influence is more pronounced for non-SOEs and for firms located in less-developed regions, indicating that institutional investor networks act as information flow facilitator and a value certifier to encourage innovation activities.

Sharia Mutual Funds: Protection Study For Investorsabstrak

Mutual funds are an alternative investment because of the opportunity to get better investment returns within a certain period of time. All investments including mutual funds are inseparable from violations and crimes, so the purpose of this paper is to find out about legal protection for investors as consumers. This paper was compiled using normative research, data related to this research were obtained from literature studies, and analysis was carried out by referring to documents related to the discussion. The results of this paper show that the operational mechanism between investors and Investment Managers of Islamic mutual funds uses the wakalah and mudharabah systems. Legal Protection for Investors According to Law Number 8 of 1995 concerning Capital Markets contained in article 100 paragraph 2 and article 101 paragraph 3, Bapepam-LK has the right to carry out inspections and investigations, this is a process of supervisory activities aimed at providing protection and legal certainty for among investors. According to UUPM has the authority to give administrative sanctions and criminal sanctions. Apart from that, legal protection for investors According to Law Number 21 of 2011 concerning the Financial Services Authority in Article 28, Article 29, and Article 30, aspects of protection for capital market investors are under the authority of the OJK. Provisions related to providing information on financial products and assisting consumers in filing lawsuits in court to fulfill consumer rights.

Analyzing the Ability of Investment Managers in Equity Mutual Funds during the Covid-19 Pandemic in Indonesia

Mutual fund is one of the investment instruments widely used as an investment option. There are two essential things to be considered by the Investment Manager as a mutual fund manager: the stock selection and the market timing ability. The Covid-19 pandemic has caused many investors to experience potential investment losses. Understanding stock selection and market timing will be needed for determining which Investment Managers perform well in managing equity mutual fund, especially while dealing with the Covid-19 pandemic. The objective of this study is to analyze the ability of Investment Managers to perform stock selection and market timing, the performance of equity mutual fund, and the effect of stock selection and market timing ability on the performance of equity mutual fund in Indonesia. This study applies the Fama net selectivity methods to assess stock selection ability and Treynor-Mazuy and Henriksson-Merton models to analyze market timing ability. Sharpe, Treynor, and Jensen's alpha methods are also used for measuring mutual fund performance. The data is processed per mutual fund to recognize each mutual fund's stock selection and market timing ability. Furthermore, the research spans two time periods: before and following the Covid-19 pandemic. A dataset of 104 equity mutual funds from 2016-2021 has been analyzed. The findings show that only 9 and 12 Investment Managers have stock selection ability prior to and following the Covid-19 pandemic, respectively. According to Treynor Mazuy model, there are only two Investment Managers with market timing ability prior to the Covid-19 pandemic, and only twelve Investment Managers have market timing ability during the Covid-19 pandemic, according to the Henriksson-Merton model. Every mutual fund with stock selection ability outperformed the benchmark. However, not all equity mutual fund with market timing ability outperformed the benchmark.

The role of individual investment bankers in IPO pricing: Evidence from investor bidding behavior

Using unique datasets on investor bidding and on investment bankers' biography, we examine the role of individual investment bankers in the process of IPO pricing. We find that when an investment banker has a social connection with a mutual fund manager, this manager is significantly more likely to (1) participate in the IPO, (2) submit above average bid prices, (3) realize lower IPO returns. The effect of investment bankers' social relationships is more pronounced when the issuer has low accounting quality and/or when the underwriter is a small bank. Further evidence shows that social relationships between investment bankers and fund managers reduce IPO underpricing. Overall, our findings suggest that social interactions help individual investment bankers to efficiently exchange value-relevant information with IPO investors.

Does Social Interaction Spread Fear Among Institutional Investors? Evidence from Coronavirus Disease 2019

We study how social connectedness affected active mutual fund manager trading behavior in the first half of 2020. In the first quarter during which the coronavirus disease 2019 (COVID-19) outbreak occurred, fund managers located in or socially connected to COVID-19 hotspots sold more stock holdings compared with a control group of unconnected managers. The economic impact of social connectedness on stock holdings was comparable with that of COVID-19 hotspots and was elevated among “epicenter” stocks most susceptible to the pandemic shock. In the second quarter, social interaction had an overall negative effect on fund performance, but this effect depended on manager skill; unskilled managers who were connected to the hotspots underperformed, whereas skillful managers suffered no deleterious effect. Our evidence suggests that social connections can intensify salience bias for all but the most skilled institutional investors, and policy makers should be wary of the destabilizing role of social networks during market downturns. This paper was accepted by Gustavo Manso, finance. Funding: This work was supported by the Social Science and Humanities Research Council of Canada. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4814 .

Factors Affecting the Performance of the Mutual Fund in Nepal

This study examines macro and micro factors affecting Nepalese mutual fund results. This study used panel data from March 2016 to November 2022 to determine the success factors of Nepal's 16 mutual funds.
 Nepalese mutual funds' irregular performance is due to national economic conditions and individual fund peculiarities. This research analyzes the influence of economic events and fund attributes on the performance of Nepalese mutual funds by using risk-adjusted returns proposed by William Sharpe (1994). This research evaluated how macroeconomic and fund-factor changes affected Nepal's mutual funds.
 The results show a positive relationship between fund age, assets turnover ratio, fund size, and exchange rate. Liquidity is a non-factor in mutual fund performance, but growth in gross domestic product, inflation, interest rates, and the money supply (M2) all harm fund return. Managers of mutual funds are encouraged to follow the recommendations made in this study to keep their portfolios as diversified as possible.

Better Than the Markets: Mutual Fund Managers’ Perceptions of the Rich

This article investigates the cultural perceptions and the common sense held by Finnish mutual fund managers on the very wealthy and the rich in times of growing inequalities and increased wealth accumulation at the top. By studying the financial intermediaries on the shop-floor level, who embody the promises of popular finance, the article describes how fund managers working for the small investors make sense of the inequalities caused by financialization. In the research interviews analysed in the article, the mutual fund managers perceive the rich as a necessary and salutary part of the contemporary economy, whose function is to be and behave better than the financialized markets. This common sense concerning the rich helps to legitimize increasing wealth accumulation at the top, so that the fund managers’ perceptions of the rich embody an ideological coalition between the working financiers and the super-rich rentiers, a coalition that contrasts starkly with the promises of popular finance.

Speculation with Information Disclosure

AbstractSophisticated investors frequently choose to publicly disclose private information, a phenomenon inconsistent with most theories of speculation. We propose and test a model to bridge this gap. We show that when a speculator cares about both short-term portfolio value and long-term profit, a disclosure mixing asset fundamentals and her holdings is optimal by inducing competitive dealership to revise prices toward those holdings while alleviating adverse selection. We find that when mutual fund managers have stronger short-term incentives, the frequency of strategic non-anonymous disclosures about their stocks by market-worthy newspaper articles increases and those stocks’ liquidity improves, consistent with our model.

Optimal decision-making of mutual fund temporary borrowing problem via approximate dynamic programming

Temporary borrowing is a liquidity risk management tool for mutual fund managers to meet investor redemption demands. We develop a new Markov decision process model to describe the temporary borrowing process, considering the multiple lending channels, the validity period of loans, and the uncertainties of cost, demand, and maximum loan amount simultaneously. An approximate dynamic programming (ADP) algorithm is initiated to solve the cost-minimizing temporary borrowing problem. We construct the value function as a separable approximation and prove the convexity of its components with respect to the available funds in different channels. Moreover, a new value function updating formula, DMAX, is designed to overcome value function overestimation. The proved convexity and the proposed formula contribute to fast and reliable value function estimation. Numerical experiments based on actual business data show that the proposed algorithm can obtain near-optimal decisions in deterministic cases and maintain high robustness in stochastic cases.

Market Timing, Selectivity, and Performance of Technology Exchange-Traded Funds and Mutual Funds

This study compares the risk-adjusted performance of technology mutual funds and exchange-traded funds with several benchmark indexes from January 2010 to July 2021. It is discovered that the average monthly returns on technology mutual funds and exchange-traded funds were highly correlated with the DJIA US Technology, NASDAQ 100 Tech, NYSE Arca Tech 100 Index, and S&P 500 Information Technology benchmark indexes. Furthermore, technology mutual funds outperformed exchange-traded funds and benchmark indexes in absolute and risk-adjusted performance. In addition, it is discovered that institutional technology funds’ risk-adjusted performance was marginally greater than noninstitutional funds’ risk-adjusted performance, and index technology mutual funds outperformed nonindex funds in risk-adjusted performance. Unconditional models indicated that technology mutual fund managers may have some market timing ability but no security selection skill. Conditional performance evaluation models indicated that fund managers do not have superior security selection techniques or the ability to time the market.

Investment Research Application Based on Mutual Fund Knowledge Graph

Mutual funds have become one of the main participants in the A-share market. Analyzing their investment direction and holdings can help investors conduct market research and make more reasonable investment decisions. In order to improve the ability to analyze mutual funds, this article proposes a technical solution for an intelligent research system based on mutual fund knowledge graph, which constructs a knowledge graph covering all mutual funds and fund managers information in the A-share market, and sets 8 calculation indicators to comprehensively analyze the fund's holdings, adjustments and performance. Finally, the technical solution is launched on the company's internal system, greatly improving work efficiency.

ESG Skill of Mutual Fund Managers

ESG Skill of Mutual Fund Managers

The Real Effect of Sociopolitical Racial Animus: Mutual Fund Manager Performance During the AAPI Hate

The Real Effect of Sociopolitical Racial Animus: Mutual Fund Manager Performance During the AAPI Hate

Mutual Fund Management Fees and Returns: A Stochastic Dominance Analysis

Mutual Fund Management Fees and Returns: A Stochastic Dominance Analysis

How Do Mutual Fund Management Fee Changes Impact Mutual Fund Flows?

How Do Mutual Fund Management Fee Changes Impact Mutual Fund Flows?

(Not) Everybody's Working for the Weekend: A Study of Mutual Fund Manager Effort

(Not) Everybody's Working for the Weekend: A Study of Mutual Fund Manager Effort

Conceptual framework for testing the market timing and stock selection ability of mutual fund managers’ in India

Conceptual framework for testing the market timing and stock selection ability of mutual fund managers’ in India

Costs of voting and firm performance: Evidence from RegTech adoption in Chinese listed firms

Employing the 2014 mandatory adoption of online shareholder voting in China, we show that the reduction of voting costs through online voting is positively related to participation in shareholder meetings and future firm performance. Our mechanism analysis suggests that the improved firm performance is mainly driven by the enhanced governance role played by informed investors and institutional investors. Further analysis shows that online shareholder voting makes the firms more attractive to mutual fund managers who are far away from the firms. Moreover, we find that the improved firm performance is concentrated in firms with low controlling shareholder ownership, and that online shareholder voting is associated with an increased likelihood of vetoing proposals and lower tunneling.

Mutual fund herding and audit pricing

This study investigates how investor trading behavior affects audit pricing by examining mutual fund herding in specific. When mutual fund managers herd due to information cascade, mimicking incentive, or agency problem, it causes information friction and weakens their monitoring effectiveness. Heightened governance risk is associated with higher audit risk and thus higher audit pricing. In our empirical tests, we find that herding weakens mutual funds’ information advantage and monitoring effectiveness, ultimately resulting in higher audit fees. To mitigate the endogeneity concern, we employ the natural experiment of the 2004 SEC regulation change on mutual fund disclosure frequency to capture exogenous change in herding intensity. Our findings are robust using propensity score matching method and alternative measures. Consistent with our conjecture, we document that firms facing stronger mutual fund herding are associated with deteriorated corporate disclosure quality.