Mutual funds typically invest a disproportionately large portion of their portfolio in one industry (main industry). We present a simple theoretical model to demonstrate that better mutual fund managers make larger investments in the important supplier/customer industries related to the main...

Why do portfolio managers actively manage their stock portfolios? The finance literature suggests the importance of financial incentives, effort, information and career concerns. We suggest that personality can also be a factor. We perform an experiment with industry experts. The experiment...

The relationship between asset demand and information quality in rational expectations economies is analyzed. First we derive a number of new summary descriptive statistics that measure four basic characteristics of investment style: asset selection, market timing, aggressiveness, and...