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A study of analyst-run mutual funds: The abilities and roles of buy-side analysts

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  • Cici, Gjergji
  • Rosenfeld, Claire

Abstract

We assess the abilities and the role of buy-side analysts within mutual fund families by analyzing mutual funds managed by buy-side analysts from fourteen fund families. Buy-side analysts exhibit investment abilities by realizing positive style- and risk-adjusted returns and generating superior risk-return tradeoffs. Analysts' skills have a positive impact on the performance of funds from the same family. Although some managers benefit from closely following their buy-side analysts' ideas, research generated by these analysts is generally being underutilized by affiliated managers. The underutilization is consistent with longer-tenured managers choosing to forgo some of the analysts' ideas due to career considerations.

Suggested Citation

  • Cici, Gjergji & Rosenfeld, Claire, 2016. "A study of analyst-run mutual funds: The abilities and roles of buy-side analysts," Journal of Empirical Finance, Elsevier, vol. 36(C), pages 8-29.
    • Handle: RePEc:eee:empfin:v:36:y:2016:i:c:p:8-29
    DOI: 10.1016/j.jempfin.2015.12.004
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    2. Göricke, Marc-André, 2016. "Do generalists profit from the fund families' specialists? Evidence from mutual fund families offering sector funds," CFR Working Papers 16-09, University of Cologne, Centre for Financial Research (CFR).
    3. Prince T. Medina, 2018. "Equity Analysis in Buying Company Shares on the Philippine Stock Exchange," GATR Journals jfbr148, Global Academy of Training and Research (GATR) Enterprise.
    4. Jeffrey Hobbs & Vivek Singh & Madhumita Chakraborty, 2021. "Institutional underperformance: Should managers listen to the sell-side before trading?," Review of Quantitative Finance and Accounting, Springer, vol. 57(1), pages 389-410, July.
    5. Gjergji Cici & Philip B. Shane & Yanhua Sunny Yang, 2024. "Do buy‐side analysts inform sell‐side analyst research?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(1), pages 657-691, March.

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    More about this item

    Keywords

    Mutual funds; Buy-side analysts; Performance evaluation; Career effects;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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