Family Values and the Star Phenomenon: Strategies of Mutual Fund Families
Year: 2003
Type: article
Abstract: We examine the extent to which a fund's cash flows are affected by the stellar performance of other funds in its family — and consequences of such spillovers. We show that star performance results in greater cash inflow to the fund and to other funds in its family. Moreover, families with higher variation in investment strategies across funds are shown to be more likely to generate star performance. We argue that spillovers may induce lower ability families to pursue star-creating strategies. Consistent with our conjecture, families with high variation in investment strategies across funds significantly underperform low-variation families.
Source: Review of Financial Studies
DOI: 10.1093/rfs/hhg054
Authors: Vikram Nanda, Z. Jay Wang, Lu Zheng
Institution: University of Michigan
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1975549608