Portfolio Manager Ownership and Mutual Fund Risk Taking
We study the effect of portfolio manager ownership, that is, “skin in the game”, on the risk taking of mutual funds. Using a holdings-based risk-shifting measure and a difference-indifferences approach, we find that managers with greater ownership engage in less risk-shifting behavior. We also find...
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| Main Authors: | , |
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| 格式: | text |
| 語言: | English |
| 出版: |
Institutional Knowledge at Singapore Management University
2014
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| 主題: | |
| 在線閱讀: | https://ink.library.smu.edu.sg/lkcsb_research/4546 https://ink.library.smu.edu.sg/context/lkcsb_research/article/5545/viewcontent/SSRN_id2024119.pdf |
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| 機構: | Singapore Management University |
| 語言: | English |
| 總結: | We study the effect of portfolio manager ownership, that is, “skin in the game”, on the risk taking of mutual funds. Using a holdings-based risk-shifting measure and a difference-indifferences approach, we find that managers with greater ownership engage in less risk-shifting behavior. We also find that managers with higher ownership exhibit superior reward-to-risk (i.e., Sharpe and appraisal) ratios. Funds with greater managerial ownership attract more capital flows. Taken together, our findings indicate that managerial ownership reduces managers’ incentive to engage in risk-shifting behavior and increases shareholder wealth. |
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