Do You Need More than One Manager for a Given Equity Style?

Management structure and the performance of funds of mutual funds

“…Finance theory would suggest that by holding a portfolio of funds with different managers, poor performance by one manager can be offset by another's good performance. Along these lines, Fant and O'Neal (1999) document substantial risk reduction benefits associated with diversification across fund managers. Although a similar diversification argument can be made at the fund company level, holding different companies' funds may also expand the range of investment opportunities.…”

Trustworthiness of investment manager

“…The in vest ment ac tivi ties of pen sion funds in the stock mar ket showed that (i) trus tees of pen sion funds give man date to pro fes sional in vest ment man ag ers to man age their ac tive in vest ments (Kum ples and McCrae, 1999), and (ii) that trus tees of me dium and large pension funds con tinue to use more than one in vest ment man ager (Fant and O'Neal, 1999;Ennis, 1997). Many re searches have largely con cen trated on the per form ance of the pen sion funds (Kum ples and McCrae, 1999), the per form ance of in vest ment man ag ers (Brown, Drap per and McKen zie, 1997), and the per form ance of mu tual funds (Chevaliuer and El lison, 1999).…”