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Board Overlaps in Mutual Fund Families

Author

Listed:
  • Elif Sisli Ciamarra

    (Brandeis University)

  • Abigail Hornstein

    (Wesleyan University)

Abstract

We examine a unique characteristic of mutual fund governance: a common set of di- rectors serving simultaneously on the boards of multiple funds within a fund family. At rst glance, this governance structure appears to bene t investors because it is associated with higher fund returns and better fund manager quality. However, funds with higher degrees of board overlap also charge higher marketing and distribution fees, which have been criticized as being the least transparent cost component for mutual fund investors. Board overlaps are also associated with detrimental unobserved actions by fund managers: window dressing and strategic performance transfer between funds occur more often in mutual fund families with greater degrees of director overlap. We conclude that director oversight of multiple funds is a mixed blessing.

Suggested Citation

  • Elif Sisli Ciamarra & Abigail Hornstein, 2015. "Board Overlaps in Mutual Fund Families," Working Papers 92, Brandeis University, Department of Economics and International Business School.
    • Handle: RePEc:brd:wpaper:92
    as

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    File URL: http://www.brandeis.edu/economics/RePEc/brd/doc/Brandeis_WP92.pdf
    File Function: First version, 2015
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    mutual funds; mutual fund families; board of directors;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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