The Career Paths of Mutual Fund Managers: The Role of Merit
studies; careers; mutual funds; investment advisers; performance evaluation; experiment/theoretical treatment; investment services; investment analysis & personal finance
Financial Analysts Journal
This study provides evidence that merit—specifically, performance relative to peers measured on a style-adjusted basis—plays a significant role in the length of a mutual fund manager’s career. Managers who under-perform their peers are more likely to lose their jobs. However, surviving managers of any tenure—even those who manage their funds for 10 or more years—generally do not outperform the market or their style benchmarks and do not display consistently superior performance.