Detecting Superior Mutual Fund Managers: Evidence from Copycats

Blake Phillips, Kuntara Pukthuanthong and Raghavendra Rau

The Review of Asset Pricing Studies, 2014, vol. 4, issue 2, 286-321

Abstract: We examine the ex ante ability of investors to identify superior mutual fund managers among the investor set likely most able, and with the greatest incentive to do so, their rivals. Identifying actual copycat funds via comparisons of trading in consecutive periods, we find little evidence to suggest that managers are able to detect superior funds. Copycats select funds with high prior performance and investment inflows, and the performance of the target fund reverses following copying initiation. If superior managers exist, our results suggest that the source of skill lies in private information obtained by these managers. These results are consistent with information models indicating that private, but not public, information can be profitable.

JEL-codes: G02 G11 G23 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:oup:rasset:v:4:y:2014:i:2:p:286-321.

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