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Family status and mutual fund performance

Author

Listed:
  • Andrew Clare

    (Cass Business School)

  • Niall O'Sullivan
  • Meadhbh Sherman

Abstract

Using a large and long sample of US and European mutual funds, we examine the impact that membership of a fund family has on performance. We test for strategic and competitive behaviours among family funds and whether this affects performance persistence and risk-taking. While we do not find evidence of stronger performance persistence among family funds versus non-family funds, we do find some significant differences in the future performance of portfolios of family and non-family funds formed on the basis of past performance. We find strong evidence that a fund’s mid-year ranking within its family and within its sector affects its risk-taking over the remainder of the year. However, most interestingly, we find evidence to suggest differences in the ways in which the US and European fund management industries operate, although future microstructure research would be required to identify the industry practices and cultures that may be the source of these differences.

Suggested Citation

  • Andrew Clare & Niall O'Sullivan & Meadhbh Sherman, 2014. "Family status and mutual fund performance," Journal of Asset Management, Palgrave Macmillan, vol. 15(3), pages 163-175, June.
    • Handle: RePEc:pal:assmgt:v:15:y:2014:i:3:d:10.1057_jam.2014.19
    DOI: 10.1057/jam.2014.19
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    References listed on IDEAS

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    1. Cuthbertson, Keith & Nitzsche, Dirk & O'Sullivan, Niall, 2008. "UK mutual fund performance: Skill or luck?," Journal of Empirical Finance, Elsevier, vol. 15(4), pages 613-634, September.
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    8. Alexander Kempf & Stefan Ruenzi, 2004. "Family Matters: The Performance Flow Relationship in the Mutual Fund Industry," Finance 0404012, University Library of Munich, Germany, revised 26 May 2004.
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    Cited by:

    1. Andrew Clare, 2022. "Is there a boutique asset management premium? Evidence from the European fund management industry," Journal of Asset Management, Palgrave Macmillan, vol. 23(1), pages 19-32, February.
    2. Cuthbertson, Keith & Nitzsche, Dirk & O'Sullivan, Niall, 2016. "A review of behavioural and management effects in mutual fund performance," International Review of Financial Analysis, Elsevier, vol. 44(C), pages 162-176.

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