Business Publications
Document Type
Article
Publication Date
2-2018
Volume
34
Issue
1
Journal
The Review of Financial Studies
First Page
194
URL with Digital Object Identifier
https://doi.org/10.1093/rfs/hhaa027
Last Page
226
Abstract
Using U.S. equity mutual fund data, we show that portfolio pumping – an illegal trading activity that artificially inflates year-end and quarter-end portfolio returns – is more pronounced among single-managed than team-managed funds. The magnitude of return inflation by team-managed funds is 45% lower compared to single-managed funds at year-ends. In addition, portfolio pumping decreases as team size increases. These results are mainly driven by peer effects among teams and, in some cases, amplified by less convex flows – performance relation in team managed funds. Our findings are robust to differences in fund governance, manager career concerns, local networks, fund-family policies, and regulation changes.
Notes
This is the author's version of the paper published in The Review of Financial Studies, 2021, vol 31, issue 1, available at https://doi.org/10.1093/rfs/hhaa027.