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A tale of two types: Generalists vs. specialists in asset management

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  • Zambrana, Rafael
  • Zapatero, Fernando

Abstract

Management companies assign some portfolio managers to run funds within a single investment objective (i.e., specialists), and others to run funds across several investment objectives (i.e., generalists). Our results show that funds achieve higher performance when they appoint superior pickers as specialists and market timers as generalists. We argue that these decisions are the result of a better match of manager mandates with the way information is collected and processed in each investment strategy. Overall our results are consistent with decision-making in fund families that add value to their investors by aiming to optimally assign or reassign portfolio managers.

Suggested Citation

  • Zambrana, Rafael & Zapatero, Fernando, 2021. "A tale of two types: Generalists vs. specialists in asset management," Journal of Financial Economics, Elsevier, vol. 142(2), pages 844-861.
    • Handle: RePEc:eee:jfinec:v:142:y:2021:i:2:p:844-861
    DOI: 10.1016/j.jfineco.2021.04.027
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    More about this item

    Keywords

    Mutual fund; Institutional investors; Human capital; Specialist; Generalist; Market timing; Stock picking;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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