Mutual Fund Tournament: Risk Taking Incentives Induced by Ranking Objectives

Research, Preprint English OPEN
Goriaev, Alexei P.; Palomino, Frédéric; Prat, Andrea;
(2001)
  • Publisher: Finance
  • Subject: investment trusts | investment trusts; financial management; financial risk; performance | performance | financial management | investment trusts;financial management;financial risk;performance | Interim Performance; Ranking-Based Objectives; Risk-Taking Incentives | financial risk
    • jel: jel:G11 | jel:G24
    mesheuropmc: health care economics and organizations

There is now extensive empirical evidence showing that fund managers have relative performance objectives and adapt their investment strategy in the last part of the calendar year to their performance in the early part of the year. However, emphasis was put on returns i... View more
  • References (2)

    Admati, A. and P. P°eiderer, 1996, Does it all add up? benchmark and the compensation of active portfolio managers, Journal of Business, 70: 323-350.

    Brown, K., W., Harlow and L., Starks, 1996, Of tournaments and temptations: An analysis of managerial incentives in the mutual fund industry, Journal of Finance, LI: 85-110.

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