Soft information in portfolio management

Honghui Chen, Yuanyu Qu, Tao Shen and Qinghai Wang

No 84tfm, SocArXiv from Center for Open Science

Abstract: Using detailed information on mutual fund manager company visits in China, we identify fund managers who engage in soft information acquisition to study how soft information is used in portfolio management. We find a clear divergence in fund managers’ preference for soft information. “Soft-information” managers hold fewer stocks and tend to invest in companies with high growth potential and significant idiosyncratic risk. Trades driven by soft-information acquisition are profitable, resulting in superior performance by these managers, especially in their holdings of stocks rich with soft information. Fund managers’ distinct preferences for soft vs. hard information create segmentation in both information acquisition and investments.

Date: 2024-09-27
New Economics Papers: this item is included in nep-fmk
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:84tfm

DOI: 10.31219/osf.io/84tfm

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