Leveling the playing field? The effect of disclosing fund manager activeness to individual investors

Dominik Scheld and Oscar Stolper

Journal of Banking & Finance, 2023, vol. 154, issue C

Abstract: As of April 2018, several of the largest U.S. mutual fund firms have been imposed to disclose a measure of fund manager activeness to retail investors. We evaluate the effectiveness of this intervention. We find that, even for those funds with a large overlap of holdings with the benchmark, no measurable effort to increase management activeness can be observed subsequent to the imposed disclosure. By contrast, investors strongly respond to the intervention. However, an analysis of investor reaction suggests that they do not rationally trade on the newly available information. We discuss our results and propose potential disclosure improvements.

Keywords: Mutual fund manager activeness; Investor protection; Disclosure effectiveness; Regulation; Retail finance (search for similar items in EconPapers)
JEL-codes: D12 D18 G18 G41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:154:y:2023:i:c:s0378426623001218

DOI: 10.1016/j.jbankfin.2023.106915

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