Journal of Financial and Quantitative Analysis Vol. 52 No. 6 2017

Horses for Courses: Fund Managers and Organizational Structures

Yufeng Han^1,2,3,4,5; Tom Noe^1,2,3,4,5; Michael J. Rebello^1,2,3,4,5

¹ Conference Board · ² University of Denver · ³ The University of Texas at Dallas · ⁴ University of Oxford · ⁵ University of Colorado Denver

Abstract

We model and test the relations between the team management of mutual funds, managers’ ability, performance, and holdings. Our model predicts that team-managed funds perform better and behave more conservatively than single-manager funds. However, the effect of team management is masked in equilibrium because high-ability managers rationally self-select into single-manager funds. Consistent with the model’s prediction, we find that team-managed funds perform better and deviate less from their benchmark allocations than single-manager funds with the same characteristics. These differences are marked after we control for the endogenous self-selection of managers.

DOI

10.1017/s0022109017000795

Volume

52

Issue

6

Pages

2779-2807

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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