Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/145994 
Year of Publication: 
2015
Series/Report no.: 
CFR Working Paper No. 16-03
Publisher: 
University of Cologne, Centre for Financial Research (CFR), Cologne
Abstract: 
We study the dynamics of fund manager ownership for a sample of U.S. equity mutual funds from 2005 to 2011. We find that ownership changes positively predict changes in future risk-adjusted fund performance. A one-standarddeviation increase in ownership predicts a 1.6 percent increase in alpha in the following year. Fund managers who are required to increase their ownership by fund family policy show the strongest increase in alpha. They do so by increasing their trading activity in line with the view that higher ownership aligns interests of managers with those of shareholders and induces higher effort.
Subjects: 
Mutual Funds
Fund Manager Ownership Changes
Fund Performance Predictability
Incentive Alignment
Superior Information
JEL: 
G11
G14
G20
G23
Document Type: 
Working Paper

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