Board Overlaps in Mutual Fund Families

Elif Sisli Ciamarra and Abigail Hornstein

No 92, Working Papers from Brandeis University, Department of Economics and International Business School

Abstract: We examine a unique characteristic of mutual fund governance: a common set of di- rectors serving simultaneously on the boards of multiple funds within a fund family. At rst glance, this governance structure appears to bene t investors because it is associated with higher fund returns and better fund manager quality. However, funds with higher degrees of board overlap also charge higher marketing and distribution fees, which have been criticized as being the least transparent cost component for mutual fund investors. Board overlaps are also associated with detrimental unobserved actions by fund managers: window dressing and strategic performance transfer between funds occur more often in mutual fund families with greater degrees of director overlap. We conclude that director oversight of multiple funds is a mixed blessing.

Keywords: mutual funds; mutual fund families; board of directors (search for similar items in EconPapers)
JEL-codes: G11 G23 G34 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2015-09
New Economics Papers: this item is included in nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:brd:wpaper:92

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