We examine whether mutual funds change their names to take advantage of current hot investment styles, and what effects these name changes have on inflows to the funds, and to the funds' subsequent returns. We find that the year after a fund changes its name to reflect a current hot style, the fund experiences an average cumulative abnormal flow of 28%, with no improvement in performance. The increase in flows is similar across funds whose holdings match the style implied by their new name and those whose holdings do not, suggesting that investors are irrationally influenced by cosmetic effects.

Issuers of initial public offerings (IPOs) can report earnings in excess of cash flows by taking positive accruals. This paper provides evidence that issuers with unusually high accruals in the IPO year experience poor stock return performance in the three years thereafter. IPO issuers in the most “aggressive” quartile of earnings managers have a three‐year aftermarket stock return of approximately 20 percent less than IPO issuers in the most “conservative” quartile. They also issue about 20 percent fewer seasoned equity offerings. These differences are statistically and economically significant in a variety of specifications.

This paper presents an empirical investigation of the security selection and market timing performance of a random sample of 71 U.S. equity pension fund managers using monthly returns for the period 1983-1990.The 71 equity fund managers include banks, insurance companies and investment advisors who have been allocated funds by pension plan sponsors.The data were provided by the Frank Russell Company of Tacoma, WA.While there have been many studies of U.S. equity mutual funds, ours is the first such study of which we are aware of U.S. equity pension fund managers.The estimates of selectivity and timing were derived using the Treynor and Mazuy (1966) model and the Bhattacharya and Pfleiderer (1983) model.The total sample of managers is subdivided into four groups by investment style, and a benchmark portfolio is identified for each style.We also included two benchmarks for the broad equity market.Regardless of the choice of a benchmark portfolio or estimation model, the selectivity measure is positive on average and the timing measure is negative on average.However, both selectivity and timing do appear to be somewhat more sensitive to the choice of a benchmark portfolio (and, possibly, the time period) when managers are classified by investment style.A metaanalysis was performed to quantify the effect of sampling error on the cumulated regression results.In every case, meta-analysis revealed some real variation (in excess of that attributable to sampling error) around the mean values for both selectivity and timing.An examination of the 80% probability intervals for selectivity revealed that the best managers can deliver substantial risk-adjusted excess returns.Finally, consistent with previous studies of equity mutual fund performance, we also found a negative correlation between selectivity and timing.However, we argue that the observed negative correlation in our data is largely an artifact of negatively correlated sampling errors for the two estimates.The Investment Performance of U.S. Equit>' Pension Fund Managers: An Empirical InvestigationEach year Pensions & Investments , a leading trade newspaper for the pension management industry, profiles the top 1000 pubUc and private U.S. pension funds.At year-«Kl 1990, these funds had total pension assets of $1,876 trillion.Approximately $750 billion (40 percent) was invested in equities.The Investment Company Institute estimates that $250 billion was invested in open-and closed-end equity-oriented U.S. mutual funds at year-end 1990.This snapshot indicates a 3:1 ratio for p«ision fund equity investment versus mutual fund equity investment.Not only is the dollar difference large, but also the difference in the number of managers in each universe is large.The total number of pension fund managers is much larger than the number of mutual fund managers, by a ratio of approximately 10:1.Yet surprisingly little research has been done on the investment performance of U.S. equity pension fund managers.This paper begins to fill an important gap in the literature by providing empirical evidence on the investment performance of these managers.The focus of this study is on equity pension fund managers who have been allocated funds by a pension plan sponsor.Brinson, Hood and Beebower (1986), Ippolito and Turner (1987), and Berkov-tiz, Finney and Logue (1988) examined the investment performance of a sample of large U.S. pension plans.Each plan may be composed of many fund managen in different asset categories with their own specific investment objectives and styles.In a recent study containing a wealth of informatioQ about the pension management industry, Lakonishok, Shleifer and Vishny (1992) examined the annual returns of a sample of equity pension funds over

This paper presents an empirical examination of the selectivity and market timing performance of a sample of U.S. equity pension fund managers. Regardless of the choice of benchmark portfolio or estimation model, the average selectivity measure is positive and the average timing measure is negative. However both selectivity and timing appear to be somewhat sensitive to the choice of a benchmark when managers are classified by investment style. Meta‐analysis revealed some real variation around the mean values for each measure. The 80 percent probability intervals for selectivity revealed that the best managers produced substantial risk‐adjusted excess returns. We also found a negative correlation between selectivity and timing, but we argue that the observed negative correlation in our data is largely an artifact of negatively correlated sampling errors for the two estimates.

Using end‐of‐month bid‐ask spreads for 540 NYSE stocks over the period 1982–1987, we document a seasonal pattern in which both relative and absolute spreads decline from the end of December to the end of the following January. Cross‐sectional regressions do not, however, provide evidence of a significant correlation between changes in spreads at the turn of the year and January stock returns. Either there is no cause and effect relation between the coincidental seasonals in bid‐ask spreads and January returns for NYSE stocks or the data are too “noisy” to reveal any relation.

Using end-of-month bid-ask spreads for 540 NYSE stocks over the period 1982–1987, we document a seasonal pattern in which both relative and absolute spreads decline from the end of December to the end of the following January. Cross-sectional regressions do not, however, provide evidence of a significant correlation between changes in spreads at the turn of the year and January stock returns. Either there is no cause and effect relation between the coincidental seasonals in bid-ask spreads and January returns for NYSE stocks or the data are too “noisy” to reveal any relation.

We assess the rate of replication for empirical papers in the 2010 American Economic Review. Across 70 empirical papers, we find that 29 percent have 1 or more citation that partially replicates the original result. While only a minority of papers has a published replication, a majority (60 percent) have either a replication, robustness test, or an extension. Surveying authors within the literature, we find substantial uncertainty over the number of extant replications.