Investing in low-trust countries: On the role of social trust in the global mutual fund industry
We hypothesize that social trust, in mitigating contracting incompleteness, may have an important effect on the activeness and effectiveness of delegated portfolio management. Using a complete sample of worldwide open-end mutual funds, we find that trust is positively associated with the activeness...
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| المؤلفون الرئيسيون: | , , , |
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| التنسيق: | text |
| اللغة: | English |
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Institutional Knowledge at Singapore Management University
2022
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| الموضوعات: | |
| الوصول للمادة أونلاين: | https://ink.library.smu.edu.sg/lkcsb_research/7048 https://ink.library.smu.edu.sg/context/lkcsb_research/article/8047/viewcontent/2.4.Investing_in_Low_trust_Countries_Trust_in_the_Global_Mutual_Fund_Industry.pdf |
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| المؤسسة: | Singapore Management University |
| اللغة: | English |
| الملخص: | We hypothesize that social trust, in mitigating contracting incompleteness, may have an important effect on the activeness and effectiveness of delegated portfolio management. Using a complete sample of worldwide open-end mutual funds, we find that trust is positively associated with the activeness of funds and that trust-related active share delivers superior performance (e.g., approximately 2% per year for cross-border investments). Moreover, "trust in the market" and "trust in managers" play important yet different roles for different types of cross-border delegated portfolio management. Our results suggest that trust acts as a fundamental building block for delegated portfolio management. |
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