Mutual Fund Incubation
Incubation is a strategy for initiating new funds, where multiple funds are started privately, and, at the end of an evaluation period, some are opened to the public. Consistent with incubation being used by fund families to increase performance and attract flows, funds in incubation outperform nonincubated funds by 3.5% risk-adjusted, and when they are opened to the public they attract higher flows. Postincubation, however, this outperformance disappears. This performance reversal imparts an upward bias to returns that is not removed by a fund size filter. Fund age and ticker creation date filters, however, eliminate the bias. Copyright (c) 2010 the American Finance Association.
Year of publication: |
2010
|
---|---|
Authors: | EVANS, RICHARD B. |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 65.2010, 4, p. 1581-1611
|
Publisher: |
American Finance Association - AFA |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Institutional Investors and Mutual Fund Governance: Evidence from Retail – Institutional Fund Twins
EVANS, Richard B.,
-
Disclosure and agency conflict: Evidence from mutual fund commission bundling
Edelen, Roger M., (2012)
-
Institutional Investors and Mutual Fund Governance: Evidence from Retail--Institutional Fund Twins
Evans, Richard B.,
- More ...