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Fund Characteristics, Managerial Skills and Performance Persistence: Evidence from India

Author

Listed:
  • Sudipta Majumdar

    (Indian Institute of Technology)

  • Rohan Kumar Mishra

    (Indian Institute of Technology)

  • Abhijeet Chandra

    (Indian Institute of Technology)

Abstract

This study investigates the relationship of fund managers’ performance persistence with (a) personal characteristics of managers and (b) fund characteristics. The study uses a sample of fund managers from India to create a comprehensive dataset of manager returns from December 2006 to March 2022. Using the four factor performance model of Carhart (1997), we investigate the persistence in manager performance across (a) managerial characteristics and (b) fund characteristics based on one month holding period returns over previous 24-months estimation period. The study indicates considerable persistence among the top decile fund managers who are male, MBA-postgraduate, undergraduate with technical qualifications, and also from top institutions. It is also evident among managers who are old, and possess long experience. We also find evidence of persistence in the performance of managers from foreign funds, Indian funds, and also for the joint venture predominantly Indian funds. This study allows investors in mutual funds to make more informed decisions. It is also useful for recruiters and policymakers who are responsible for appointing mutual fund managers and making policy recommendations in light of continuing regulatory changes. This can be considered one of the earliest studies to analyse the relationship of fund managers performance persistence with (a) personal characteristics of managers and (b) fund characteristics from the perspective of an emerging Indian economy.

Suggested Citation

  • Sudipta Majumdar & Rohan Kumar Mishra & Abhijeet Chandra, 2024. "Fund Characteristics, Managerial Skills and Performance Persistence: Evidence from India," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 31(2), pages 335-354, June.
    • Handle: RePEc:kap:apfinm:v:31:y:2024:i:2:d:10.1007_s10690-023-09417-8
    DOI: 10.1007/s10690-023-09417-8
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    References listed on IDEAS

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