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Recession managers and mutual fund performance

Recession managers and mutual fund performance
Recession managers and mutual fund performance
We find that fund managers who began their careers during recessions produce superior returns. This superior performance is not unconditional, as they exhibit better market timing than their non-recession counterparts in recessions, but do not demonstrate better stock picking in booms. Exploring managers’ portfolio choices across years, we find that recession managers tilt their investments towards defensive, rather than cyclical, industries during and before recession periods. Overall, our findings support the argument that the economic conditions under which an individual initially entered the labour market exert a long-term impact on her career outcomes and decision-making.
Economic conditions, Market timing, Mutual fund managers, Performance, Recession
0929-1199
Chen, Jie
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Lasfer, Meziane
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Song, Wei
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Zhou, Si
beadc2bb-99dc-4487-baf3-65b4b0b0c438
Chen, Jie
7fc6d491-b4d9-4c43-9a6c-3baae7f5de07
Lasfer, Meziane
c837949b-63b1-493c-8180-b8cdbee75d1b
Song, Wei
0d91b8a3-694b-469e-a15e-bba82dc5d090
Zhou, Si
beadc2bb-99dc-4487-baf3-65b4b0b0c438

Chen, Jie, Lasfer, Meziane, Song, Wei and Zhou, Si (2021) Recession managers and mutual fund performance. Journal of Corporate Finance, 69, [102010]. (doi:10.1016/j.jcorpfin.2021.102010).

Record type: Article

Abstract

We find that fund managers who began their careers during recessions produce superior returns. This superior performance is not unconditional, as they exhibit better market timing than their non-recession counterparts in recessions, but do not demonstrate better stock picking in booms. Exploring managers’ portfolio choices across years, we find that recession managers tilt their investments towards defensive, rather than cyclical, industries during and before recession periods. Overall, our findings support the argument that the economic conditions under which an individual initially entered the labour market exert a long-term impact on her career outcomes and decision-making.

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Recession managers and mutual fund performance - Accepted Manuscript
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Accepted/In Press date: 8 June 2021
e-pub ahead of print date: 16 June 2021
Keywords: Economic conditions, Market timing, Mutual fund managers, Performance, Recession

Identifiers

Local EPrints ID: 449798
URI: http://eprints.soton.ac.uk/id/eprint/449798
ISSN: 0929-1199
PURE UUID: 3d58089a-0bab-4f3b-9f99-f5607680562a

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Date deposited: 17 Jun 2021 16:34
Last modified: 27 Apr 2022 11:41

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Contributors

Author: Jie Chen
Author: Meziane Lasfer
Author: Wei Song
Author: Si Zhou

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