The effect of management team characteristics on risk-taking and style extremity of mutual fund portfolios
AbstractThis paper investigates the effect of management team-level characteristics on portfolio risk and style extremity using a unique dataset of 1678 mutual fund managers. Results show that teams with more members, longer tenure, and more members with graduate business training hold less risky portfolios. The opposite is true for teams whose members engage in side-by-side management; that is, they manage multiple funds simultaneously. Member diversity is related to less extreme style decisions. These findings have important implications for fund management companies as they make decisions about the composition of management teams as well as for individual investors’ investment allocation decisions.
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Bibliographic InfoArticle provided by Elsevier in its journal Review of Financial Economics.
Volume (Year): 21 (2012)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/inca/620170
Mutual fund; Team-manager; Portfolio risk;
Find related papers by JEL classification:
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
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