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The Predictability of Managerial Heterogeneities in Mutual Funds

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  • Jun Huang
  • Albert Y. Wang

Abstract

type="main"> Using a sample of Chinese mutual funds, we empirically assess how managerial heterogeneity affects mutual fund performance. We find that funds with higher manager fixed effects outperform those with lower manager fixed effects by 2% per year. We also note that fund performance improves after managers with higher fixed effects are hired. The results are consistent with the notion that manager fixed effects are associated with managerial innate ability. Finally, we find that investors pay attention to managerial attributes beyond the traditional performance measures, providing supporting evidence for the rational explanation of convex flow-performance sensitivity in the literature.

Suggested Citation

  • Jun Huang & Albert Y. Wang, 2015. "The Predictability of Managerial Heterogeneities in Mutual Funds," Financial Management, Financial Management Association International, vol. 44(4), pages 947-979, October.
    • Handle: RePEc:bla:finmgt:v:44:y:2015:i:4:p:947-979
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    References listed on IDEAS

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