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The effects of portfolio rebalancing strategies on the performance of global mutual funds

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  • Tanos, Barbara Abou
  • Jimenez-Garcès, Sonia

Abstract

This paper proposes a new measure of active management based on evaluating US global mutual funds’ industrial rebalancing strategies of their foreign holdings and investigates the impact of these strategies on fund performance. We find that US global mutual funds that engage in industrial rotation strategies enhance their performance. Our finding is robust when considering multiple funds’ managerial characteristics, several proxies of active management and different performance benchmark models. We show that active management can be highly beneficial for managers’ international asset allocation when it is industry centered. However, the gains obtained from funds’ industrial rotation strategies appear to be more pronounced for familiar markets.

Suggested Citation

  • Tanos, Barbara Abou & Jimenez-Garcès, Sonia, 2025. "The effects of portfolio rebalancing strategies on the performance of global mutual funds," Research in International Business and Finance, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:riibaf:v:76:y:2025:i:c:s0275531925000923
    DOI: 10.1016/j.ribaf.2025.102836
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    More about this item

    Keywords

    Active management; Churn rate; Mutual funds; Performance; Portfolio management;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services

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