The Quality of Your Network Matters: Professional Connections and Mutual Fund Performance
DOI:
https://doi.org/10.33423/jabe.v25i3.6335Keywords:
business, economics, mutual funds, network centrality, performance evaluations, performance predictionsAbstract
We examine whether the professional networks of mutual fund managers serve as a conduit of information that benefits fund investors. We find investors enjoy higher returns when their funds are led by well-connected managers. A long-short portfolio strategy of funds ranked upon the quality of fund managers’ networks yields positive and statistically significant mean and risk-adjusted returns to investors for both in-sample and out-of sample testing. The results suggest that manager networks enable information flows that benefit fund investors. Additionally, we present evidence that fund managers do not act on material non-public information gathered from contemporaneous board appointments.
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Published
2023-08-25
How to Cite
Chien, J., Duanmu, J., & McCumber, W. R. (2023). The Quality of Your Network Matters: Professional Connections and Mutual Fund Performance. Journal of Applied Business and Economics, 25(3). https://doi.org/10.33423/jabe.v25i3.6335
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