This study attempts to determine the degree to which the state of the macroeconomy can be used to create a mutual fund investment strategy that consistently outperforms the S&P 500. By quantifying how systematic economic factors affect the relative performance of different fund strategies...

We show that market frictions and agency considerations are important concerns when institutional investors make portfolio allocation decisions. For a sample of widely followed firms, institutional holdings increase with increases in visibility as measured by the number of analysts following the...