Recession Managers and Mutual Fund Performance

Posted: 10 Jun 2021

See all articles by Jie Chen

Jie Chen

Leeds University Business School, University of Leeds

Meziane Lasfer

Cass Business School, City, University of London

Wei Song

Southampton Business School

Si Zhou

Shanghai University

Date Written: June 8, 2021

Abstract

We find that fund managers who began their careers during recessions produce superior returns. This superior performance is not unconditional, as they exhibit better market timing than their non-recession counterparts in recessions, but do not demonstrate better stock picking in booms. Exploring managers’ portfolio choices across years, we find that recession managers tilt their investments towards defensive, rather than cyclical, industries during and before recession periods. Overall, our findings support the argument that the economic conditions under which an individual initially entered the labour market exert a long-term impact on her career outcomes and decision-making.

Keywords: Mutual fund managers, Recession, Economic conditions, Performance, Market timing

JEL Classification: G23, J24, G11

Suggested Citation

Chen, Jie and Lasfer, Meziane and Song, Wei and Zhou, Si, Recession Managers and Mutual Fund Performance (June 8, 2021). Journal of Corporate Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3863278

Jie Chen

Leeds University Business School, University of Leeds ( email )

Leeds LS2 9JT
United Kingdom

HOME PAGE: http://https://business.leeds.ac.uk/about-us/our-people/staff-directory/profile/jie-chen-1/

Meziane Lasfer (Contact Author)

Cass Business School, City, University of London ( email )

106 Bunhill Row
London, EC1Y 8TZ
Great Britain
+44 20 7040 8634 (Phone)
+44 20 7040 8881 (Fax)

HOME PAGE: http://www.cass.city.ac.uk/faculty/m.a.lasfer/

Wei Song

Southampton Business School ( email )

Highfield
University Road
Southampton, SO17 1BJ
United Kingdom

Si Zhou

Shanghai University ( email )

Room 522, Building 1,
Shanghai University,
Shanghai, Shanghai 20044
China

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