Journal article
Cross trading by investment advisers: Implications for mutual fund performance
Journal of financial intermediation, Vol.25, pp.99-130
01/01/2016
DOI: 10.1016/j.jfi.2015.06.001
Abstract
Using a unique dataset we provide new evidence on the significant penalty on client fund performance due to conflicts of interest related to the cross trading (TCT) activities of mutual fund advisers: funds managed by advisers in the top TO' quintile significantly underperform funds managed by advisers in the bottom TO' quintile by 1% per year. Adviser incentives to engage in cross trading are directly related to their opportunities for generating revenues from affiliated trading operations. Additional tests suggest that the significantly higher trading commissions paid by client funds of high-TCT advisers are a major source of their under-performance. (C) 2015 Elsevier Inc. All rights reserved.
Details
- Title: Subtitle
- Cross trading by investment advisers: Implications for mutual fund performance
- Creators
- Lorenzo Casavecchia - University of Technology SydneyAshish Tiwari - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of financial intermediation, Vol.25, pp.99-130
- Publisher
- Elsevier
- DOI
- 10.1016/j.jfi.2015.06.001
- ISSN
- 1042-9573
- eISSN
- 1096-0473
- Number of pages
- 32
- Language
- English
- Date published
- 01/01/2016
- Academic Unit
- Finance
- Record Identifier
- 9984380435702771
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