Competition and cooperation in mutual fund families

Richard Burtis Evans, Melissa Porras Prado () and Rafael Zambrana

Journal of Financial Economics, 2020, vol. 136, issue 1, 168-188

Abstract: Using manager compensation disclosure and intra-family manager cooperation measures, we create indices of family-level competitive/cooperative incentives. Families that encourage cooperation among their managers are more likely to engage in coordinated behavior (e.g., cross-trading and cross-holding) and have less volatile cash flows. Families with competitive incentives generate higher performing funds, a higher fraction of “star” funds, but greater performance dispersion across funds. In examining the determinants of incentive schemes, competitive families are more likely to manage institutional money, and cooperative families are more likely to distribute through brokers, consistent with retail demand for nonperformance characteristics.

Keywords: Mutual fund; Manager; Compensation; Incentives; Competition; Cooperation; Cross-holding; Performance; Cross-subsidization; Internal capital markets (search for similar items in EconPapers)
JEL-codes: G23 J33 J44 L22 M12 M52 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:136:y:2020:i:1:p:168-188

DOI: 10.1016/j.jfineco.2019.09.004

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