The effects of portfolio rebalancing strategies on the performance of global mutual funds

Barbara Abou Tanos and Sonia Jimenez-Garcès

Research in International Business and Finance, 2025, vol. 76, issue C

Abstract: This paper proposes a new measure of active management based on evaluating US global mutual funds’ industrial rebalancing strategies of their foreign holdings and investigates the impact of these strategies on fund performance. We find that US global mutual funds that engage in industrial rotation strategies enhance their performance. Our finding is robust when considering multiple funds’ managerial characteristics, several proxies of active management and different performance benchmark models. We show that active management can be highly beneficial for managers’ international asset allocation when it is industry centered. However, the gains obtained from funds’ industrial rotation strategies appear to be more pronounced for familiar markets.

Keywords: Active management; Churn rate; Mutual funds; Performance; Portfolio management (search for similar items in EconPapers)
JEL-codes: G11 G14 G15 G2 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:76:y:2025:i:c:s0275531925000923

DOI: 10.1016/j.ribaf.2025.102836

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