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- Title
Hot Hands in Mutual Funds: Short-Run Persistence of Relative Performance, 1974-1988.
- Authors
Hendricks, Darryll; Patel, Jayendu; Zeckhauser, Richard
- Abstract
The relative performance of no-load, growth-oriented mutual funds persists in the near term, with the strongest evidence for a one-year evaluation horizon. Portfolios of recent poor performers do significantly worse than standard benchmarks; those of recent top performers do better, though not significantly so. The difference in risk-adjusted performance between the top and bottom octile portfolios is six to eight percent per year. These results are not attributable to known anomalies or survivorship bias. Investigations with a different (previously used) data set and with some post-1988 data confirm the finding of persistence.
- Subjects
NO-load mutual funds; MUTUAL funds; INVESTMENTS; PERFORMANCE; EVALUATION; FINANCIAL performance; RISK management in business; NO-load stocks; PORTFOLIO performance; STATISTICAL bias
- Publication
Journal of Finance (Wiley-Blackwell), 1993, Vol 48, Issue 1, p93
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/j.1540-6261.1993.tb04703.x