TY - JOUR
T1 - Top Management Turnover: An Examination of Portfolio Holdings and Fund Performance
AU - Gallagher, David R.
AU - Nadarajah, Prashanthi
AU - Pinnuck, Matt
PY - 2006/12
Y1 - 2006/12
N2 - We examine the performance and portfolio characteristics of actively managed equity funds impacted by top management turnover. Utilizing a unique database of monthly portfolio holdings, our study finds that, post-replacement, previously poor performing funds experience improved returns. However, this improved performance is not attributable to superior stock selection skill. We also find these new managers decrease the fund's reliance on momentum strategies and decrease the portfolio's concentration, which then leads to a reduced tracking-error volatility. Prior to the replacement event, underperforming investment managers exhibit preferences for larger, growth-oriented stocks, as well as riding momentum strategies and increasing portfolio turnover.
AB - We examine the performance and portfolio characteristics of actively managed equity funds impacted by top management turnover. Utilizing a unique database of monthly portfolio holdings, our study finds that, post-replacement, previously poor performing funds experience improved returns. However, this improved performance is not attributable to superior stock selection skill. We also find these new managers decrease the fund's reliance on momentum strategies and decrease the portfolio's concentration, which then leads to a reduced tracking-error volatility. Prior to the replacement event, underperforming investment managers exhibit preferences for larger, growth-oriented stocks, as well as riding momentum strategies and increasing portfolio turnover.
UR - http://www.scopus.com/inward/record.url?scp=84992792973&partnerID=8YFLogxK
U2 - 10.1177/031289620603100205
DO - 10.1177/031289620603100205
M3 - Article
AN - SCOPUS:84992792973
SN - 0312-8962
VL - 31
SP - 265
EP - 292
JO - Australian Journal of Management
JF - Australian Journal of Management
IS - 2
ER -