What determines fund performance persistence? International evidence

• Autor(a) principal: Ferreira, M. A.
• Data de Publicação: 2019
• Outros Autores: Keswani, A., Miguel, A. F., Ramos, S. B.
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/20816
• topic: Fund industry competition; G15; G23; Manager skill; Mutual fund persistence

We study performance persistence across a global sample of equity mutual funds from 27 countries. In contrast to the existing U.S.-based evidence, we find that net performance persistence is present in the majority of fund industries, suggesting that fund manager skill is commonplace rather than a rarity. Consistent with the intuition that more competition in the mutual fund industry makes remaining a winner fund less likely but keeping a loser fund at the bottom of the performance ranks more probable, we show that competitiveness explains the cross-sectional variation in performance persistence.