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Back to the roots: Ancestral origin and mutual fund manager portfolio choice

Author

Listed:
  • Ammann, Manuel
  • Cochardt, Alexander Elmar
  • Straumann, Simon
  • Weigert, Florian

Abstract

We exploit variation in the ancestries of U.S. equity mutual fund managers to show that ancestry affects portfolio decisions. Controlling for fund firm location, we find that funds overweight stocks from their managers' ancestral home countries in their non-U.S. portfolio by 132 bps or 20.34% compared with their peers. Similarly, funds overweight industries that are comparatively large in their manager's ancestral home countries. Stocks linked to managers' ancestry do not outperform stocks in the same countries and industries but held by managers of other ancestries. This supports the notion that ancestry-linked investments are not informed but due to familiarity.

Suggested Citation

  • Ammann, Manuel & Cochardt, Alexander Elmar & Straumann, Simon & Weigert, Florian, 2022. "Back to the roots: Ancestral origin and mutual fund manager portfolio choice," CFR Working Papers 22-04, University of Cologne, Centre for Financial Research (CFR).
    • Handle: RePEc:zbw:cfrwps:2204
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    More about this item

    Keywords

    Culture; Home Bias; Mutual Funds; Portfolio Choice; Fund Managers;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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