Title

Management structure and the performance of funds of mutual funds

Date of this Version

12-1-2009

Document Type

Journal Article

Publication Details

Interim status: Citation only.

Bertin, W. J. & Prather, L. (2009). Management structure and the performance of funds of mutual funds. Journal of business research, 62(12), 1364-1369.

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2009 HERDC submission. FoR code: 1503

© Copyright Elsevier Inc, 2008. All rights reserved.

Abstract

A rapidly growing mutual fund category is funds of funds (FOFs) which invest in other mutual funds instead of individual securities. This study reports on FOFs' characteristics and performance relative to traditional equity mutual funds and finds that FOFs compare favorably. FOFs with identified managers outperform their unidentified counterparts, and FOFs that invest in-family outperform both traditional equity funds and those FOFs investing out-of-family. Finally, replicating FOFs' holdings can be prohibitively expensive since they commonly hold funds with high minimum initial investments, closed funds and/or funds that are restricted to a particular investor type.

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This document has been peer reviewed.