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MUTUAL FUND PERFORMANCE PERSISTENCE AND COMPETITION: A CROSS‐SECTOR ANALYSIS
Author(s) -
Keswani Aneel,
Stolin David
Publication year - 2006
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.2006.00182.x
Subject(s) - persistence (discontinuity) , competition (biology) , mutual fund , business , work (physics) , economics , monetary economics , finance , mechanical engineering , ecology , geotechnical engineering , engineering , biology
Existing work on mutual fund performance persistence obtains diverse results, depending on the group of funds studied. We examine whether performance persistence within a peer group of competing mutual funds depends on the group's composition. The U.K. mutual fund industry is ideal for such an examination because funds compete within strictly defined sectors. We consider several attributes related to the intensity of competition within a sector and use them to explain sector‐level persistence. We find robust evidence that persistence is higher in sectors where concentration of assets under management is higher.