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Company visits and mutual fund performance: new evidence on managerial skills

Author

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  • Yanan Li

    (Beijing Normal University)

  • Wenjun Wang

    (Agricultural Bank of China)

Abstract

This study shows that the use of private information obtained during company visits is related to managerial skills. We construct a novel measure of a mutual fund’s capability of using such private information by considering the overlap between its stockholdings and its site visits. We find that the allocation of stocks of visited companies in a fund portfolio significantly improves its performance. The impact is more pronounced for mutual funds that hold relatively neglected stocks or stocks with inadequate information disclosure. Our findings suggest that communications with company managers provide significant information advantages for fund managers.

Suggested Citation

  • Yanan Li & Wenjun Wang, 2022. "Company visits and mutual fund performance: new evidence on managerial skills," Journal of Asset Management, Palgrave Macmillan, vol. 23(6), pages 504-521, October.
    • Handle: RePEc:pal:assmgt:v:23:y:2022:i:6:d:10.1057_s41260-022-00273-1
    DOI: 10.1057/s41260-022-00273-1
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    More about this item

    Keywords

    Mutual fund performance; Company visit; Private information;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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