NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Are Some Mutual Funds Managers Better Than Others? Cross-Sectional Patterns in Behavior and Performance

Judith Chevalier, Glenn Ellison

NBER Working Paper No. 5852
Issued in December 1996
NBER Program(s):   AP   CF   IO

In this paper we explore cross-sectional differences in the behavior and performance of mutual fund managers. In our simplest regression of a fund's market excess return on characteristics of its manager we find that younger managers earn much higher returns than older managers and that managers who attended colleges with higher average SAT scores earn much higher returns than do managers from less selective institutions. These differences appear to derive both from systematic differences in expense ratios and risk-taking behavior and from additional systematic differences in performance managers from higher SAT schools have higher risk-adjusted excess returns. Managers with the paper also presents a preliminary look at the labor market for mutual fund managers. Our data suggest that managerial turnover is more performance sensitive for younger managers

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Document Object Identifier (DOI): 10.3386/w5852

Published: Journal of Finance, Vol. 54, no. 3 (June 1999): 875-899.

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