Research Library
The Aftermath of Fund Management Change
By Madison Sargis, Kai Chang | 24 July 2017
In this paper, we explore the relationship between observed investor preferences for, and eventual investor outcomes in, funds with management changes. Funds undergoing management changes are particularly interesting to us because the market views such changes with apprehension. In recent years there have been a few highly publicized management changes—most notably, Bill Gross and PIMCO or Greg Serruier and Dodge & Cox—that have resulted in notably large outflows. Yet, prior to this study, we did not know how the typical fund fared after a management change. Are investors worse off after management changes? How do investors react? When do the effects of a change in flows or performance kick in, if ever? By studying these questions, can we identify potential behavior gaps for investors?
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