Finance Seminar with Jonathan Berk, Stanford Graduate School of Business, Stanford University
The Department of Finance is proud to announce the upcoming seminar with Jonathan Berk, Stanford Graduate School of Business, Stanford University.
Jonathan will present:
Measuring Skill in the Mutual Fund Industry
Authors:
Jonathan B. Berk, Stanford University and NBER
Jules H. van Binsbergen, Stanford University and NBER
Abstract:
Using the dollar-value that a mutual fund adds as the measure of skill, we find that the average mutual fund adds about $2 million per year and that this skill persists for as long as 10 years. We further document that investors recognize this skill and reward it by investing more capital with better funds. Better funds earn higher aggregate fees, and there is a strong positive correlation between current compensation and future performance.