Skilled active liquidity management: Evidence from shocks to fund flows

I examine the active liquidity management of U.S. equity mutual funds facing unexpected, persistent investor withdrawals by exploiting two independent shocks: the 2003 mutual fund scandal and the 2016 introduction of Morningstar Sustainability Ratings. I document that fund managers increase portfoli...

Celý popis

Uloženo v:
Podrobná bibliografie
Vydáno v:Journal of empirical finance Ročník 81; s. 101579
Hlavní autor: Rzeźnik, Aleksandra
Médium: Journal Article
Jazyk:angličtina
Vydáno: Elsevier B.V 01.03.2025
Témata:
Equity mutual funds
Liquidity management
Managerial skills
Liquidity management
Managerial skills
Equity mutual funds
ISSN:0927-5398
On-line přístup:Získat plný text
Tagy: Přidat tag
Žádné tagy, Buďte první, kdo vytvoří štítek k tomuto záznamu!
Popis
Shrnutí:I examine the active liquidity management of U.S. equity mutual funds facing unexpected, persistent investor withdrawals by exploiting two independent shocks: the 2003 mutual fund scandal and the 2016 introduction of Morningstar Sustainability Ratings. I document that fund managers increase portfolio liquidity by adjusting both equity and cash holdings when subject to sudden, moderate, and prolonged outflows. Among affected funds, those that more aggressively increase portfolio liquidity significantly outperform their less liquidity-focused peers, suggesting that skilled managers employ active liquidity management to minimize costs imposed by redemption obligations. •I exploit two independent shocks to mutual fund net flows.•Fund managers increase portfolio liquidity when subject to sudden outflows.•Skilled managers employ liquidity management to minimize costs im- posed by outflows.
ISSN:0927-5398
DOI:10.1016/j.jempfin.2025.101579