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Asian Review of Financial Research, Vol., No..
pp.113~165
pp.113~165
Fund concentration and its determinants in the Korean active fund market
Jee-Hyun Kim Business School, Seoul National University
Hyuk Choe Business School, Seoul National University
This paper examines whether the fund concentration is driven by informational advantage or managers¡¯ overconfidence, and, furthermore, the determinants that force fund managers to hold concentrated funds. Comparing the performance between diversified funds and focused funds, we find that concentrated funds are induced by overconfident behavior of managers. To analyze what drives managers to hold concentrated funds, we explore self-attribution bias, demographic characteristics of managers, and sharing-the-blame effect. Using a unique and detailed dataset, we find that age and the number of managers are main driving forces behind fund managers¡¯ overconfidence, suggesting that demographic characteristic and sharing-theblame effect influence fund concentration.
Jee-Hyun Kim
Hyuk Choe
This paper examines whether the fund concentration is driven by informational advantage or managers¡¯ overconfidence, and, furthermore, the determinants that force fund managers to hold concentrated funds. Comparing the performance between diversified funds and focused funds, we find that concentrated funds are induced by overconfident behavior of managers. To analyze what drives managers to hold concentrated funds, we explore self-attribution bias, demographic characteristics of managers, and sharing-the-blame effect. Using a unique and detailed dataset, we find that age and the number of managers are main driving forces behind fund managers¡¯ overconfidence, suggesting that demographic characteristic and sharing-theblame effect influence fund concentration.
fund concentration,fund performance,overconfidence,demographic characteristics,sharing-the-blame effect