Picking winners? Investment consultants’ recommendations of fund managers

• Autores: Tim Jenkinson, HOWARD JONES, Jose Vicente Martinez
• Localización: The Journal of finance, ISSN 0022-1082, Vol. 71, Nº 5, 2016, págs. 2333-2370
• Idioma: inglés
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• Resumen

  • Investment consultants advise institutional investors on their choice of fund manager. Focusing on U.S. actively managed equity funds, we analyze the factors that drive consultants’ recommendations, what impact these recommendations have on flows, and how well the recommended funds perform. We find that investment consultants’ recommendations of funds are driven largely by soft factors, rather than the funds’ past performance, and that their recommendations have a significant effect on fund flows. However, we find no evidence that these recommendations add value, suggesting that the search for winners, encouraged and guided by investment consultants, is fruitless.