TY - JOUR
T1 - Do locals perform better than foreigners?
T2 - An analysis of UK and US mutual fund managers
AU - Shukla, Ravi K.
AU - van Inwegen, Gregory B.
N1 - Funding Information:
The authors thank William L. Braman of Baring America Asset Management, an anonymous referee, and participants of the Eastern Finance Association Conference for their helpful discussions. Financial support from the Ballentine Center for the Study of Securities Markets is gratefully acknowledged.
PY - 1995/8
Y1 - 1995/8
N2 - We hypothesize that local knowledge and contacts lead to superior returns for local mutual fund managers relative to foreign managers. To test this hypothesis, we study the performance of mutual funds in two countries: the US and UK. We examine the effectiveness of UK open end fund managers (foreigners) investing in the US relative to US open end fund managers (locals) investing in the US. Controlling for differential tax treatment, fund expenses, fund objectives, and currency risk, we find that UK mutual funds investing in the US perform worse than US domestic funds. We conclude that information/relationship disadvantages and fund size contribute to this poor performance.
AB - We hypothesize that local knowledge and contacts lead to superior returns for local mutual fund managers relative to foreign managers. To test this hypothesis, we study the performance of mutual funds in two countries: the US and UK. We examine the effectiveness of UK open end fund managers (foreigners) investing in the US relative to US open end fund managers (locals) investing in the US. Controlling for differential tax treatment, fund expenses, fund objectives, and currency risk, we find that UK mutual funds investing in the US perform worse than US domestic funds. We conclude that information/relationship disadvantages and fund size contribute to this poor performance.
UR - http://www.scopus.com/inward/record.url?scp=0038393212&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0038393212&partnerID=8YFLogxK
U2 - 10.1016/0148-6195(95)00009-G
DO - 10.1016/0148-6195(95)00009-G
M3 - Article
AN - SCOPUS:0038393212
SN - 0148-6195
VL - 47
SP - 241
EP - 254
JO - Journal of Economics and Business
JF - Journal of Economics and Business
IS - 3
ER -