Boots on the Grounds: The Value of International Locations in Asset Management

Allaudeen Hameed, Massimo Massa and Zhenghui Ni

No 19490, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We explore how international mutual funds, operating across diverse global markets, enhance market timing by leveraging access to nuanced macroeconomic insights. We document that asset management firms (AMFs) with a broad global footprint significantly enhance fund performance through improved access to valuable macroeconomic data. This advantage becomes particularly evident during periods of heightened economic uncertainty, supported by effective information sharing among funds within the AMF network. To further validate these findings, we utilized the global travel restrictions imposed during the COVID-19 pandemic as natural experiment, revealing a causal link between macroeconomic information access and fund performance. Our results underscore the critical role of global presence in effectively accessing and disseminating essential macroeconomic intelligence.

Date: 2024-09
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