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Fund family tournament and performance consequences : evidence from the UK fund industry.

Zhang, Zhichao and Ding, Li and Zhou, Si and Fu, Yaoyao (2014) 'Fund family tournament and performance consequences : evidence from the UK fund industry.', Multinational finance journal., 18 (1/2). pp. 43-84.


By applying tournament analysis to the UK Unit Trusts data, the results support significant risk shifting in the family tournament; i.e. interim winning managers tend to increase their level of risk exposure more than losing managers. It also shows that the risk-adjusted returns of the winners outperform those of the losers following the risk taking, which implies that risk altering can be regarded as an indication of managers’ superior ability. However, the tournament behaviour can still be a costly strategy for investors, since winners can be seen to beat losers in the observed returns due to the deterioration in the performance of their major portfolio holdings.

Item Type:Article
Keywords:Mutual fund family, Fund performance, Tournament, Risk taking.
Full text:(AM) Accepted Manuscript
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Date accepted:10 February 2014
Date deposited:29 April 2014
Date of first online publication:31 March 2014
Date first made open access:No date available

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