Asset Manager Commonality and Portfolio Similarity

Ali Ozdagli and Dylan Ryfe

No 2515, Working Papers from Federal Reserve Bank of Dallas

Abstract: Asset managers are increasingly influential in financial markets. We use new regulatory as well as manually collected data on asset managers of life insurers, the largest institutional investors of corporate bonds, and find that insurers with the same asset managers have more similar portfolios and trades. This similarity increases further if the asset manager actively oversees the majority of both insurers’ assets. Moreover, the effect intensifies the longer insurers share the same asset manager. Nevertheless, the effect is primarily driven by purchases rather than sales and the resulting increase in correlation of portfolio returns is relatively small, alleviating associated financial stability concerns.

Keywords: insurance companies; asset managers; portfolio similarity; financial stability; investment behavior (search for similar items in EconPapers)
JEL-codes: G11 G18 G2 (search for similar items in EconPapers)
Pages: 49
Date: 2025-04-25, Revised 2025-06-04
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DOI: 10.24149/wp2515r1

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