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Managerial ownership changes and mutual fund performance

Listed author(s):
  • Martin, Thorsten
  • Sonnenburg, Florian
Registered author(s):

    We study the dynamics of fund manager ownership for a sample of U.S. equity mutual funds from 2005 to 2011. We find that ownership changes positively predict changes in future risk-adjusted fund performance. A one-standarddeviation increase in ownership predicts a 1.6 percent increase in alpha in the following year. Fund managers who are required to increase their ownership by fund family policy show the strongest increase in alpha. They do so by increasing their trading activity in line with the view that higher ownership aligns interests of managers with those of shareholders and induces higher effort.

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    File URL: https://www.econstor.eu/bitstream/10419/145994/1/866576622.pdf
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    Paper provided by University of Cologne, Centre for Financial Research (CFR) in its series CFR Working Papers with number 16-03.

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    Date of creation: 2015
    Handle: RePEc:zbw:cfrwps:1603
    Contact details of provider: Postal:
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    Phone: 0221 / 470 5607
    Fax: 0221 / 470 5179
    Web page: http://cfr-cologne.de/english/version06/html/home.php
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