Allocation of decision rights and the investment strategy of mutual funds

• 成果类型: Article
• 署名作者: Dass, Nishant; Nanda, Vikram; Wang, Qinghai
• 署名单位: University System of Georgia; Georgia Institute of Technology
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2013.06.004
• 发表日期: 2013
• 页码: 254-277
• 关键词: teams; Coordination costs; Decision rights; performance; Mutual funds

摘要

The literature suggests that while decentralized decision making can allow for greater specialization in an organization, it heightens the cost of coordinating decisions. The mutual fund industry in particular, sole- and team-managed balanced funds-provides an ideal setting to test the specialization versus coordination trade-off, as information on decision structures and fund actions is easily obtained. We show that sole-managed balanced funds, with centralized decision rights, exhibit significant market timing that requires reallocation across asset classes. However, consistent with coordination difficulties between managers specializing in particular asset classes, no market timing is evident in team-managed balanced funds. Team-managed funds exhibit greater returns from specialization, in the form of better security selection performance than sole-managed funds. These results hold cross-sectionally and for funds that switch management structures. The overall returns across different management structures are similar, indicating a market equilibrium. Investor flows reward market-timing performance for sole- but not team-managed funds. (c) 2013 Elsevier B.V. All rights reserved.