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Do generalists profit from the fund families' specialists? Evidence from mutual fund families offering sector funds

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  • Göricke, Marc-André

Abstract

This paper analyzes how the existence of sector funds (specialists) within a mutual fund family affects the performance and investment behavior of affiliated diversified equity funds (generalists). First of all, I show that specialists have stock picking skills. Second, information flows from the specialist to the generalist. The overlap in specialist and generalist industry sub-portfolios is positively related to the past track-record of the specialist in this industry and specialist work experience and negatively related to the overall work experience and the industry track-record of the generalist. Generally, stocks held by specialists appear in more diversified funds of the family than other stocks. As a result, diversified funds from fund families with sector funds perform better, trade more, and hold more hard-to-value stocks than their peers from families without sector funds.

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  • 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).
    • Handle: RePEc:zbw:cfrwps:1609
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    References listed on IDEAS

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    More about this item

    Keywords

    mutual funds; fund families; analyst skills; manager skills; information sharing; fund performance; investment behavior;
    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
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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