<Para ID="Par3">The tournament hypothesis of Brown et al. (J Finance 51(1):85–110, <CitationRef CitationID="CR7">1996</CitationRef>) posits that managers of poorly performing funds actively increase portfolio risk in the second half of the year. At the same time, it is a well-established fact that stock returns and the subsequent return standard...</citationref></para>

<Para ID="Par3">The tournament hypothesis of Brown et al. (J Financ 51(1):85–110, <CitationRef CitationID="CR2">1996</CitationRef>) conjectures that mutual funds with a below-average performance over the first half of the year tend to increase their risk in the second half of the year. Schwarz (Rev Financ Stud 25(3):913–936, <CitationRef CitationID="CR14">2012</CitationRef>) argues that the...</citationref></citationref></para>

We study the performance and portfolio characteristics of 828 newly launched US equity mutual funds over the period 1991-2005. These fund starts initially earn, on average, higher excess returns and higher abnormal returns. Their risk-adjusted performance is also superior to existing funds....

We propose a new measure of portfolio activity, the Modified Turnover, which represents the portion of the portfolio that the manager changes from one quarter to the next. Compared with the traditional turnover, our Modified Turnover measure relies on portfolio holdings and takes into account...

Interest in socially responsible investing (SRI) has skyrocketed within the mutual fund industry. Central to this development is whether SRI funds underperform conventional funds. Using a novel approach, we decompose mutual fund portfolios into socially responsible (green) and non-socially...