Mutual fund performance: banking versus independent managers

Abstract

We examine the performance of mutual fund managers for a sample of Spanish mutual funds considering data on active management, loads, size and the number of funds managed per manager. We find evidence of differences in fund performance according to management: independent managers outperform their banking counterparts even when the lower associated fees are considered. Overall, our results suggest that superior active managers do exist and the slight discrepancies which arise between managers can be interpreted as agency problems.

Keywords:

• mutual fund
• performance
• manager
• active management

JEL Classification:

• G23
• G11

Acknowledgement

This study is part of research project SEJ2007-67204/ECON supported by Ministerio de Ciencia y Tecnología and P1-1B2009-54 by Fundació Caixa Castelló/Bancaixa and Universitat Jaume I.

Notes

¹ The Spanish mutual fund industry essentially developed in the second half of the 1990s. For this reason, if we had selected an earlier starting date for the sample period, the number of funds in the sample would have been dramatically reduced. Thus, the use of daily data enables the possibility of analysing a large volume of information for all the funds existing from 30 June 1998.