Measuring Skill in the Mutual Fund Industry
Jonathan B. Berk and
Jules van Binsbergen ()
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Jonathan B. Berk: Stanford University
Research Papers from Stanford University, Graduate School of Business
Using the dollar-value a mutual fund manager adds as the measure of skill, we find that not only does skill exist (the average mutual fund manager adds about $2 million per year), but this skill is persistent, as far out as 10 years. We further document that investors recognize this skill and reward it by investing more capital with skilled managers. Higher skilled managers are paid more and there is a strong positive correlation between current managerial compensation and future performance.
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Journal Article: Measuring skill in the mutual fund industry (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3131
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