The aim of this study is to identify differences in investment behavior - and in particular the special case of a team's decision-making process - as well as possible performance indicators. The research results to be presented should be used as guidance in selecting an appropriate management structure for the mutual fund industry. Before addressing the differing investment behaviors of the two management structures, the special dynamics that can operate within a team in decision making have to be examined. For this said purpose, the relevant literature provides some conflicting theories on decision making.
When looking at the proportion of team-managed and single-managed mutual funds, it is observed that team funds have increased at the cost of single-managed funds. Thus, from 1992 to 2015, within all mutual funds, team-managed funds increased from 12% to 57%, while single-managed funds decreased from 88% to 43%. A similar development can be seen in the change of the management structure of a fund in Figure 1: A total of 553 mutual funds, which were previously managed individually, switched to a team fund, whereas only 317 funds changed from a team-managed fund to an single-managed fund.
A crossover in the proportion of teams after the global financial crisis in 2008, in times when risk reduction by diversification began to gain in importance, is clearly observable. Thus, it should be in the interest of mutual funds to possess sufficient management diversity to reach an adequate niveau of diversification. As argued by Tom Stevenson, the investment director of Fidelity International, besides gender diversity, diversity in cognition, education and mindset represent a great strength. Research on the mutual fund industry indicates some differences in the investment behavior between team-managed and single-managed mutual funds. Especially concerning teams, different theories of decision making can be found, resulting in different investment styles and performance levels.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Theory
- Classical decision making theory
- Behavioral decision making
- Group shift theory
- Diversification of opinions theory
- Literature
- Differences in investment behavior
- Performance
- Empirical Study
- Data and methodology
- Risk and performance evaluation
- Risk taking
- Performance evaluation
- Results
- Critical review
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study aims to identify differences in investment behavior between single-managed and team-managed mutual funds, specifically exploring the decision-making processes within teams and their impact on fund performance. The research findings will provide insights into the selection of appropriate management structures for the mutual fund industry.
- Decision-making theories in team-managed funds
- Differences in investment behavior between single-managed and team-managed funds
- Performance evaluation of single-managed and team-managed funds
- The impact of management structure on fund performance
- The role of diversity in decision-making within team-managed funds
Zusammenfassung der Kapitel (Chapter Summaries)
The study begins by analyzing the historical trend of management structures in the mutual fund industry, highlighting the increasing dominance of team-managed funds over single-managed funds. The chapter then introduces classical decision theory and behavioral decision theory, comparing them to group shift theory and diversification of opinions theory. These theoretical frameworks provide a basis for understanding the decision-making dynamics within teams.
Chapter 3 delves into the existing literature regarding differences in investment behavior and performance between single-managed and team-managed mutual funds. This section lays the groundwork for the empirical study by identifying potential patterns and areas for further investigation.
Chapter 4 presents the empirical study itself, outlining the data and methodology used. The chapter then analyzes the risk taking behavior and performance evaluation of the two types of funds, concluding with a critical review of the findings.
Schlüsselwörter (Keywords)
The study primarily focuses on mutual fund management, decision-making theories, investment behavior, fund performance, team-managed funds, single-managed funds, risk, and diversity.
- Citation du texte
- Yunus Cagdas (Auteur), 2021, Management structure for the mutual fund industry. Performance indicators and investment behavior of a team's decision-making process, Munich, GRIN Verlag, https://www.grin.com/document/1158473
