Fund manager skill: selling matters more!

Onur Kemal Tosun (), Liang Jin (), Richard Taffler () and Arman Eshraghi ()
Additional contact information
Onur Kemal Tosun: Cardiff University
Liang Jin: Transfar Group
Richard Taffler: University of Warwick
Arman Eshraghi: Cardiff University

Review of Quantitative Finance and Accounting, 2022, vol. 59, issue 3, No 5, 969-994

Abstract: Abstract We examine whether mutual fund managers have differential skill in the buy and sell domains. Although they have characteristic-timing ability in aggregate, we show they exhibit asymmetric ability when buying and selling. Our key finding is that fund managers with superior selling ability are significantly better at buying stocks and, as a result, earn significantly higher aggregate returns. However, fund managers who buy stocks successfully do not necessarily have parallel selling skills, leading to lower returns overall. Thus, we provide strong evidence that selling skill is the key determinant of overall mutual fund timing performance.

Keywords: Mutual funds; Timing ability; Trade motivation; Investment performance; Attention (search for similar items in EconPapers)
JEL-codes: C15 G11 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11156-022-01065-9

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