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Volume 32 Number 3 March 2008 |
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The State of Origin of Australian Equity: Does Active Fund Manager Location Matter? |
| Kingsley Fong David R. Gallagher Adrian D. Lee |
Abstract |
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We examine the relation of active equity fund managers' location proximity to a stock's headquarter and fund managers' stock selection skill and investment behaviour using a representative sample of Australian institutional equity funds. Contrary to the findings of much international research, our study reveals evidence which is inconsistent with a location advantage for Melbourne and Sydney active equity funds. Both Melbourne and Sydney fund managers overweight Melbourne stocks, exhibit skill in picking Sydney stocks and avoid poor performing Melbourne and Sydney stocks. In addition, we find no evidence of word-of-mouth trading effects in Melbourne or Sydney funds. Taken together, this suggests information asymmetries arising from location are weak for Melbourne and Sydney funds.
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Keywords |
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LOCATION; INFORMATION ADVANTAGES; PORTFOLIO MANAGEMENT; INVESTMENT PERFORMANCE.
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Contact DetailsKingsley FongDavid R. Gallagher Adrian D. Lee Australian School of Business, The University of New South Wales, Sydney, NSW 2052. Email: ad.lee@unsw.edu.au |
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