Why mutual funds “underperform”☆

Are Mutual Funds Doomed to Underperform? Evidence from Managerial Turnover and Fund Flows

We empirically investigate the impact of fund flows and managerial turnover on the investment performance of active equity mutual funds. Fund flows have been suggested by Berk and Green (2004) as mechanism that prevents performance persistence. We propose managerial turnover as an alternative explanation. One the one hand, withdrawing money from loser funds and sacking bad fund managers are mea...

Why are some mutual funds closed to new investors?

Fund families typically claim that closing a fund protects the fund’s superior performance by preventing it from growing too large to be managed efficiently. Even though funds with better performance and larger size are more likely to be closed, there is no evidence that closing a fund can indeed protect its performance. Instead, fund closing decisions are more likely to be motivated by spillov...

Mutual Funds in Equilibrium∗

Historically, the literature on money management has not consistently applied the rational expectations equilibrium concept. We explain why and summarize recent developments in the money management literature that do apply this concept correctly. We demonstrate that in many respects the rational expectations equilibrium better approximates the observed equilibrium in the money management space ...

Mutual Funds by Edwin

Essays on Mutual Funds

Title of dissertation: ESSAYS ON MUTUAL FUNDS Nitin Kumar, Doctor of Philosophy, 2013 Dissertation directed by: Professor Russ Wermers Department of Finance Robert H. Smith School of Business This dissertation comprises of three essays on mutual funds. In the first essay, I test whether fund investors rationally incorporate portfolio manager ownership disclosure in their portfolio allocation de...