Cross-Fund Subsidization under the Same Fund Managers

• Main Authors: Wei-Lun Tsai, 蔡維倫
• Other Authors: Christine W.Lai
• Format: Others
• Language: en_US
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/97510816825647837349

碩士 === 元智大學 === 財務金融學系 === 97 === This study examines whether mutual fund managers transfer performance from old funds to favor the newly issuing funds under the same manager. This study finds that newly issuing funds perform at the expense of old funds under the same manager. This phenomenon shows that the cross-fund subsidization exists among mutual funds under the same manager. Moreover, managers can use some methods to subsidize newly issuing funds. This study examines how fund managers proceed cross-fund subsidization between newly issuing funds and old funds by examining (1) the allocation of IPOs and (2) the opposite trades. This study find that in small families managers can enhance the newly issuing funds performance by allocating more underpricing IPO shares to newly issuing funds than to old funds under the same mamagers. Also, there exists opposite trades between newly issuing funds and old funds under the same manager.