How do family strategies affect fund performance? When performance-maximization is not the only game in town

• 成果类型: Article
• 署名作者: Massa, M
• 署名单位: INSEAD Business School
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(02)00253-2
• 发表日期: 2003
• 页码: 249-304
• 关键词: mutual funds; market structure; performance; behavioral finance

摘要

This is a first attempt to study how the structure of the industry affects mutual fund behavior. I show that industry structure matters; the mutual fund families employ strategies that rely on the heterogeneity of the investors in terms of investment horizon by offering the possibility to switch across different funds belonging to the same family at no cost. I argue that this option acts as an externality for all the funds belonging to the same family, affecting the target level of performance the family wants to reach and the number of funds it wants to set up. By using the universe of the U.S. mutual fund industry, I empirically confirm this intuition. I find evidence of family driven heterogeneity among funds and show that families actively exploit it. I argue that the more families are able to differentiate themselves in terms of non-performance-related characteristics, the less they need to compete in terms of performance. Product differentiation-i.e., the dispersion in the services (fees, performance) that the competing funds offer-affects performance and fund proliferation. In particular, I show that the degree of product differentiation negatively affects performance and positively affects fund proliferation. (C) 2002 Elsevier Science B.V. All rights reserved.