Making a difference: European mutual funds distinctiveness and peers’ performance
Sophie Béreau (),
Jean-Yves Gnabo () and
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Henri, Vanhomwegen: Université de Namur
No 2019015, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
Skilled managers of equity mumtual funds can develop innovoative strategies to outsmart their style peers. We unveil various causes of distinct investment strategies and test whether they materialize into outperformance of peer competitors. We frame our paper on European funds and propose a novel procedure to measure and test the impact of strategy distinctiveness while dealing with endogenous style classification and sample noise in peers’ comparisons of performance. We find a strong, robust and positive impact of ostrategy distinctiveness on financial performance. Yet, the marginal effect decreases with the level of distinctiveness.
Keywords: European equity mutual funds; distinctiveness; commonality; peer performance; adaptivei clustering (search for similar items in EconPapers)
JEL-codes: G11 G12 G23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fmk and nep-ore
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Journal Article: Making a Difference: European Mutual Funds Distinctiveness and Peers’ Performance (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2019015
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