Speed of Information Diffusion within Fund Families

Gjergji Cici, Stefan Jaspersen and Alexander Kempf

The Review of Asset Pricing Studies, 2017, vol. 7, issue 1, 144-170

Abstract: We document that speed of information dissemination within mutual fund families positively affects fund performance. This suggests that the resultant benefits of higher information precision far outweigh free-riding costs associated with fast internal dissemination. The performance effect is stronger when information travels across managers from different, rather than the same, styles. This is consistent with fast information diffusion aggregating complementary insights that sharpen information precision, but also with fewer free-riding opportunities among managers from different styles. Managers rationally exploit the resultant higher information precision by trading more, relying less on public information, and investing differently than unaffiliated peers.

JEL-codes: D23 G23 L22 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:oup:rasset:v:7:y:2017:i:1:p:144-170.

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