Differences in Short-Term Performance Persistence by Mutual Fund Equity Class

Download or read book Differences in Short-Term Performance Persistence by Mutual Fund Equity Class written by Andrew L. Detzel and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: To consistently earn positive alpha, active fund managers must have access to mispriced stocks. We show that mispricing varies by equity class in such a way that greater mispricing occurs in smaller-cap and more value-oriented stocks, providing opportunity for managers in these classes. Accordingly, we find the greatest evidence that top-performing mutual fund managers continue to earn positive alpha in smaller-cap and more value-oriented classes when investigating quarterly performance persistence by equity class. Conversely, large cap funds show no evidence of persistence in superior performance. In contrast to the patterns of persistence in superior performance, relative performance persists in all equity classes.