Work

The People in Your Neighborhood: Social Interactions and Mutual Fund Portfolios

Year: 2014

Type: article

Abstract: ABSTRACT We find that socially connected fund managers have more similar holdings and trades. The overlap of funds whose managers reside in the same neighborhood is considerably higher than that of funds whose managers live in the same city but in different neighborhoods. These effects are larger when managers share a similar ethnic background, and are not explained by preferences. Valuable information is transmitted through these peer networks: a long‐short strategy composed of stocks purchased minus sold by neighboring managers delivers positive risk‐adjusted returns. Unlike prior empirical work, our tests disentangle the effects of social interactions from community effects.

Source: The Journal of Finance

DOI: 10.1111/jofi.12208

Authors: VERONIKA K. POOL, NOAH STOFFMAN, SCOTT E. YONKER

Institutions: Indiana University, Western University, University of Miami, Cornell University, The Ohio State University, Arizona State University, Miami University, University of Toledo

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2526910328

FWCI: 34.72

Cites: 55

Cited by: 463

Related to: 10