{"title":"Are active mutual fund managers skilled in picking stock concepts?","authors":"Jinlin Fu , Xiaomeng Lu , Yuxin Xie , Binxu Wang","doi":"10.1016/j.iref.2025.104474","DOIUrl":null,"url":null,"abstract":"<div><div>We provide a novel assessment of active mutual fund managers’ investment skills by analyzing the stock concepts they trade—a unique aspect of the Chinese stock market where stocks are grouped by themes or trends. We find that managers purchase stock concepts that subsequently outperform those they sell, demonstrating genuine investment skill. This outperformance is evident in both returns and earnings and is not driven by private information or concept momentum effects. Additionally, fund managers perform better when trading concepts dominated by growth stocks compared to value stocks. In contrast, retail investors underperform when trading stock concepts. Our findings highlight the value-added role of active fund managers in selecting stock concepts and offer new insights into mutual fund performance evaluation.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"103 ","pages":"Article 104474"},"PeriodicalIF":5.6000,"publicationDate":"2025-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Economics & Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1059056025006379","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
We provide a novel assessment of active mutual fund managers’ investment skills by analyzing the stock concepts they trade—a unique aspect of the Chinese stock market where stocks are grouped by themes or trends. We find that managers purchase stock concepts that subsequently outperform those they sell, demonstrating genuine investment skill. This outperformance is evident in both returns and earnings and is not driven by private information or concept momentum effects. Additionally, fund managers perform better when trading concepts dominated by growth stocks compared to value stocks. In contrast, retail investors underperform when trading stock concepts. Our findings highlight the value-added role of active fund managers in selecting stock concepts and offer new insights into mutual fund performance evaluation.
期刊介绍:
The International Review of Economics & Finance (IREF) is a scholarly journal devoted to the publication of high quality theoretical and empirical articles in all areas of international economics, macroeconomics and financial economics. Contributions that facilitate the communications between the real and the financial sectors of the economy are of particular interest.