Government Investment Behavior: Evidence from California Pooled Money

Local governments are playing an increasingly prominent role in the global investment area by holding large publicly-held pools of assets. The incentives for bureaucrats’ engagement financial and their expertise presumably distinctive from professional investors private markets. Therefore, it’s intriguing to study these government-held funds’ patterns performance. To investigate problems, this paper uses a hand-collected novel data set that covers transaction details California government pooled money account (PMIA) 2014 2020. This presents statistical analysis investments last 7 years differences similarities behavior performance between mutual funds. also model measure similarity I construct two relevant funds require different levels sophistication selecting securities activeness but similar PMIA other dimensions. Then compare performances with PMIA’s next period. concluded does perform worse it is not because passive strategy lack sophisticated skill. provides new evidence rigorous methods.