Research On The Effect Of Fund Managers’ Characteristics On Fund Performance

The investment strategy and investment ability of fund managers are the important factors that influence the performance of investment funds. How to choose a good fund managers to obtain the better performance of the fund is a problem that every investor and fund management companies, and it is an important part which can not be ignored in the development process of the fund industry. Although there have been studies to prove that the personal characteristics of fund managers will have an impact on the investment behavior of fund managers and fund performance, but the specific impact mechanism and the path of the impact has not been clear. This paper focuses on the effect and the path of the individual characteristics of the fund managers influencing on the performance of the fund.We decompose the fund performance. We build the framework of comprehensive fund performance evaluation of three levels. The first level is the comprehensive performance of the fund, the second level is to decompose the comprehensive performance of the fund for the excess returns of the fund and the total risk, the third level is the decomposition of fund excess returns and risk, the excess return is decomposed for the fund manager’s timing ability and security selecting ability, and the total risk is divided into systematic risk and non systematic risk. In order to comprehensive coverage data information as much as possible, we selected fund manager personal characteristics from four aspects as the physiological characteristics of fund managers, educational background, professional skill and occupation experience. With fixed time effect of unbalanced panel models, we regress the index within the framework of fund performance evaluation respectively, for an empirical study on the effect of the individual characteristics of fund managers on the performance of the fund. Empirical results show that the excess returns, market timing and stock picking ability of fund is easily affected by the fund managers’ working experience. Generally, fund manager who is not only younger,but also with more experience in fund management can obtain higher excess returns. At the same time, the fund managers with a good educational background will have a favorable impact on the fund’s risk control.Fund performance evaluation framework with three level also means fund managers characteristics can have an impact on fund performance by multi path. In order to explore the efficiency of different path in which characteristics of fund managers affect fund performance, firstly, this paper investigate the efficiency of excess returns and risk path through the establishment of elastic logarithm regression model in the evaluation system of the second level, and It is concluded that the change of excess returns has a greater impact on the fund’s comprehensive performance. Then study the efficiency of the path in which the stock-picking ability and timing skill affect the excess returns, it is concluded that the stock-picking ability made greater contribution to the excess return. Finally come to the conclusion, fund manager characteristics mainly affect the excess returns through the stock-picking ability, thereby affecting the performance of the fund. Therefore, the personal characteristics that influence the stock-picking ability is the factor that should be especially paid attention to in the evaluation of comprehensive ability of fund managers. According to the empirical results, age, working funds, serving enterprises and MBA education is correlated significantly with stock picking ability. Therefore, fund managers that is younger, job hopping behavior less and serving the rich number of fund tend to have higher stock picking ability, and can achieve better performance of the fund.