| Authors |
Massa, Wang, Zhang, Zhang |
| Journal |
Journal of Financial and Quantitative Analysis |
| Year |
2020 |
| Type |
Published Paper |
| Abstract |
We hypothesize that social trust, in mitigating contracting incompleteness, may have an important effect on the activeness and effectiveness of delegated portfolio management. Using a complete sample of worldwide open-end mutual funds, we find that trust is positively associated with the activeness of funds and that trust-related active share delivers superior performance (e.g., approximately 2% per year for cross-border investments). Moreover, "trust in the market" and "trust in managers" play important yet different roles for different types of cross-border delegated portfolio management. Our results suggest that trust acts as a fundamental building block for delegated portfolio management. |
| Keywords |
Social trust, portfolio management, mutual fund, contracting relationship |
| URL |
https://doi.org/10.1017/S0022109020000848 |
| Tags |
Archival Empirical |
Experimental / Survey-Based Empirical |
Investment Decisions (Institutional)
|