Fund Company Site Visits and Mutual Fund Performance

Summary

This study examines whether Chinese fund management companies’ visits to listed firms are associated with the performance of the funds they manage. It proposes that visits can improve investment decisions by giving institutions access to operational details and information that may reduce information gaps. The analysis uses 202 samples from 58 firms over 2010–2016, comparing performance across fund-size groups and estimating ordinary least squares regressions with visit frequency and company size as explanatory factors.

The reported results associate more frequent visits with stronger fund performance overall, while company size is negatively related to performance. The positive association is concentrated among medium-sized fund companies; it is not statistically clear for the smallest and largest groups. The authors report similar findings after removing extreme observations and using alternative size groupings. These are historical observational results, so they do not establish that visits cause better performance. The findings also come from a limited sample and may not generalize beyond the studied Chinese funds and period.

Key ideas

• The study tests whether listed-company visit frequency is associated with fund performance.
• It uses size-sorted performance comparisons and OLS regressions on a sample of Chinese fund companies.
• More visits are positively associated with performance in the overall sample.
• The positive relationship appears most clearly among medium-sized fund companies.
• Fund company size is negatively associated with performance, and the observational design cannot establish causation.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.