Fund Characteristics, Managerial Skills and Performance Persistence: Evidence from India

Sudipta Majumdar (), Rohan Kumar Mishra () and Abhijeet Chandra ()
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Sudipta Majumdar: Indian Institute of Technology
Rohan Kumar Mishra: Indian Institute of Technology
Abhijeet Chandra: Indian Institute of Technology

Asia-Pacific Financial Markets, 2024, vol. 31, issue 2, No 6, 335-354

Abstract: Abstract This study investigates the relationship of fund managers’ performance persistence with (a) personal characteristics of managers and (b) fund characteristics. The study uses a sample of fund managers from India to create a comprehensive dataset of manager returns from December 2006 to March 2022. Using the four factor performance model of Carhart (1997), we investigate the persistence in manager performance across (a) managerial characteristics and (b) fund characteristics based on one month holding period returns over previous 24-months estimation period. The study indicates considerable persistence among the top decile fund managers who are male, MBA-postgraduate, undergraduate with technical qualifications, and also from top institutions. It is also evident among managers who are old, and possess long experience. We also find evidence of persistence in the performance of managers from foreign funds, Indian funds, and also for the joint venture predominantly Indian funds. This study allows investors in mutual funds to make more informed decisions. It is also useful for recruiters and policymakers who are responsible for appointing mutual fund managers and making policy recommendations in light of continuing regulatory changes. This can be considered one of the earliest studies to analyse the relationship of fund managers performance persistence with (a) personal characteristics of managers and (b) fund characteristics from the perspective of an emerging Indian economy.

Keywords: Fund Manager; Manager Performance; Managerial Skills; Mutual Funds; Performance Persistence; G11; G12; G41 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10690-023-09417-8

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