Mutual Fund Performance and Governance Structure: The Role of Portfolio Managers and Boards of Directors
This paper conducts a comprehensive analysis of the relation between the performance and governance structure of open-end, domestic-equity mutual funds during the 1985 to 2002 period. Specifically, we analyze the role of fund managers in generating portfolio performance, as well as the role of fund boards, both in the ongoing performance of the fund, and in replacing underperforming managers. We find evidence that experienced large-fund managers and managers with better track-records outperform their size, book-to-market, and momentum benchmarks, which indicates that managers play an important role in generating portfolio performance. However, we find that experienced managers of smaller funds underperform their benchmarks, indicating the presence of managerial entrenchment in the mutual fund industry. When we examine the role of boards, we find that higher numbers of outside directors are associated both with better future fund performance and with a higher likelihood of replacing underperforming managers, which indicates that outside board members play an important role in gathering information about the skills of fund managers that is not captured by information contained in mutual fund flows. Overall, our findings add new insights to the ongoing debate on fund governance.
Bill Ding Russ Wermers
Department of Finance School of Business SUNY at Albany Albany, NY 12222 Department of Finance Robert H. Smith School of Business University of Maryland College Park, MD 207
国际会议
西安
英文
2006-07-17（万方平台首次上网日期，不代表论文的发表时间）