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Manager professional background: impact on performance and style

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thesis
posted on 28.03.2022, 10:41 by Sijin Wang
The prior professional experience of a manager is important for investors to be able to evaluate the opportunity and risk associated with them. Using a sample of funds and managers taken from Chinese open-ended mutual funds from February 2002 to December 2017, we find that managers with diverse professional experience perform differently and manage their funds in a variety of styles. Managers from government and research backgrounds have a higher risk-adjusted return while facing less market risk. Further detailed analysis shows that managers with government and research backgrounds have efficient investment skills, although market timing measurements suggest that the source of their informational advantage may differ. In contrast, managers with an investment background have higher raw returns generated by following ordinary investment strategies and taking higher systematic risk. Fund managers from a banking background make more money growth on their funds and compensate for their lower performance in generating returns. These results are robust after controlling time and fund fixed effects. In summary, we provide a possible explanation for the mechanism of the impact of prior professional experience on fund performance, whereby managers use the comparative advantage accumulated along career to retrieve informational advantage and generate abnormal return.

History

Table of Contents

1. Introduction - 2. Institutional background of the Chinese mutual fund industry -- 3. Empirical predication -- 4. Sample and data -- 5. Empirical results and analysis -- 6. Robustness checks -- 7. Fund manager professional experience and new money growth -- 8. Conclusion.

Notes

Empirical thesis. Bibliography: pages 53-57

Awarding Institution

Macquarie University

Degree Type

Thesis MRes

Degree

MRes, Macquarie University, Faculty of Business and Economics, Department of Applied Finance

Department, Centre or School

Department of Molecular Sciences

Year of Award

2019

Principal Supervisor

Jing Shi

Rights

Copyright Sijin Wang 2018. Copyright disclaimer: http://mq.edu.au/library/copyright

Language

English

Jurisdiction

China

Extent

1 online resource (viii, 57 pages) graphs, tables

Former Identifiers

mq:70958 http://hdl.handle.net/1959.14/1269403