Measuring Managerial Skill in the Mutual Fund Industry
Jonathan B. Berk and
Jules van Binsbergen ()
No 18184, NBER Working Papers from National Bureau of Economic Research, Inc
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.
JEL-codes: G11 G2 G20 G23 (search for similar items in EconPapers)
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