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Is a Team Different from the Sum of its Parts Evidence from Mutual Fund Managers

Is a Team Different from the Sum of its Parts Evidence from Mutual Fund Managers This paper provides the first empirical test of the diversification of opinions theory and the group shift theory using real business data. Our data set covers management teams and single managers of US equity mutual funds. Our results reject the group shift theory and support the diversification of opinions theory: teams follow less extreme investment styles, their portfolios are less industry concentrated, and they are eventually less likely to achieve extreme performance outcomes. These results hold after taking into account the impact of fund and family characteristics as well as manager characteristics. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Finance Oxford University Press

Is a Team Different from the Sum of its Parts Evidence from Mutual Fund Managers

Review of Finance , Volume 15 (2) – Apr 11, 2011

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References (6)

Publisher
Oxford University Press
Copyright
The Authors 2010. Published by Oxford University Press on behalf of the European Finance Association. All rights reserved. For Permissions, please email: journals.permissions@oup.com
ISSN
1572-3097
eISSN
1573-692X
DOI
10.1093/rof/rfq014
Publisher site
See Article on Publisher Site

Abstract

This paper provides the first empirical test of the diversification of opinions theory and the group shift theory using real business data. Our data set covers management teams and single managers of US equity mutual funds. Our results reject the group shift theory and support the diversification of opinions theory: teams follow less extreme investment styles, their portfolios are less industry concentrated, and they are eventually less likely to achieve extreme performance outcomes. These results hold after taking into account the impact of fund and family characteristics as well as manager characteristics.

Journal

Review of FinanceOxford University Press

Published: Apr 11, 2011

Keywords: JEL Classification: G23 M54

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