The Exclusive Role of Centralized Fund Family Management

David Hunter (), Zhen Sun and Karen Benson
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David Hunter: University of Queensland
Zhen Sun: University of Queensland
Karen Benson: University of Queensland

Journal of Financial Services Research, 2020, vol. 58, issue 2, No 5, 199-236

Abstract: Abstract Fund families are centrally managed, and can directly control resource allocations between funds. We quantify multiple manageable fund family attributes, and examine their combined effects upon returns and investor flows. We focus upon five attributes that are exclusively manageable by fund families: marginal fee economies of scale, star fund offerings, mixed high and low risk product offerings, within-family manager scope, and manager outsourcing. We find sensitivity differences during the financial crisis and non-crisis time periods. Management of these exclusive attributes significantly improve a fund family’s returns and investor flows, benefiting fund families and their investors during both normal and financial crisis periods. We find that investors reward fund families with greater performance sensitive inflows and weaker performance sensitive outflows, indicating that investors identify greater utility in centrally managed fund families.

Keywords: Non-bank financial institutions; Mutual funds; Investment performance (search for similar items in EconPapers)
JEL-codes: G23 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10693-019-00328-2

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