Some days ago, I came across yet another interesting study on manager selection. The idea of this week’s AGNOSTIC Paper is very straight forward. When you hire a fund manager, you want this person to focus on your money and not do much else. Probably no one would agree to a surgery where the surgeon operates on five patients at the same time. So why hire a fund manager who manages more than one fund?
- Manager multitasking strongly increased from 1990 to 2018
- Managers who start multitasking tend to have better track records
- Fund performance decreases significantly after managers start multitasking
- The number of managed funds amplifies the effect of multitasking
- Investors put less money into existing funds of multitasking managers