Is there a home field advantage in global markets?

Murali Jagannathan, Wei Jiao and G. Andrew Karolyi

Journal of Financial Economics, 2022, vol. 143, issue 2, 742-770

Abstract: International equity mutual funds increasingly hire managers from countries linked to their geographic mandate. We show these funds with “home-linked managers” exhibit a strong bias to invest in stocks of the managers' home countries and attract more flows. Portfolios of stocks from countries in which a fund has a home-field advantage outperform those managed by funds without home-linked managers. We are unable to identify specific sources of an information advantage associated with the home-linked manager's performance. But an analysis of fund flows reveals a role of investor trust in home-linked managers earned primarily through past superior performance.

Keywords: International mutual funds; Home bias; Mutual fund flows and performance; Information, Trust (search for similar items in EconPapers)
JEL-codes: F32 F36 G11 G15 G23 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:143:y:2022:i:2:p:742-770

DOI: 10.1016/j.jfineco.2021.11.002

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