Article ID Journal Published Year Pages File Type
1016947 Journal of Business Research 2016 9 Pages PDF
Abstract

This study examines why a new fund manager changes the mutual fund holding portfolio of his or her predecessor immediately after management turnover. The study considers three possible explanations: private information, reputation concerns, and grace periods for new managers to sell underperforming stocks. Monthly data for the study come from a unique database of the Securities Investment Trust and Consulting Association in Taiwan over the period from 2004 to 2012. Both the regression models and the fuzzy-set qualitative comparative analysis (fsQCA) confirm that for the one-year period following a change of manager, portfolio turnover contributes to new managers' outperformance of their predecessors, thus supporting the private information hypothesis. However, for the three-month period following a change of manager, causal asymmetry occurs: portfolio turnover can lead to outperformance or underperformance outcomes, supporting the hypotheses of private information and successors' grace period.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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