"Smart" copycat mutual funds : on the performance of partial imitation strategies

Roberto Stein

Using a novel measure of stock-level trade imitation, we uncover "smart" copycats: fund managers that use their own information when beneficial, and otherwise imitate other managers' better trades. Contrary to previous research, we find that these partial imitation strategies lead to outperformance. Our "Copycat Score" combines the propensity to imitate and to lead trades. Funds at the high and low ends of the score outperform all others. The Copycat Score is persistent in time, related to other measures of skill, and a good predictor of fund performance. We conclude that smart copycatting is another skill of successful fund managers.

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Year of publication:	2022
Authors:	Stein, Roberto
Published in:	Financial innovation : FIN. - Heidelberg : SpringerOpen, ISSN 2199-4730, ZDB-ID 2824759-0. - Vol. 8.2022, Art.-No. 92, p. 1-31
Subject:	Copycat portfolios \| Fund manager skill \| Fund performance \| Mutual funds \| Portfolio holdings \| Investmentfonds \| Investment Fund \| Portfolio-Management \| Portfolio selection \| Kapitaleinkommen \| Capital income \| Anlageverhalten \| Behavioural finance \| Unternehmenserfolg \| Firm performance \| Performance-Messung \| Performance measurement