Does Fund Size Erode Mutual Fund Performance? The Role of Liquidity and Organization

By Joseph Chen, Harrison G. Hong, Ming-hsiang Huang, Jeffrey D. Kubik. 2004

1,363 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/34bc0767932a427dd153209fd9adb194b9eb423d

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Citations in the corpus

Organizational structure as a determinant of performance: Evidence from mutual funds (2012, methodology): “The controls used, which are in line with those used in the mutual fund literature (e.g., Chen et al., 2004), were: (1) Beta i , the risk profile of the fund as measured by its Beta with respect to the S&P500; (2) log(ParentSizei), the size of the parent firm (the firm owning the fund) as measured…”
Incentives and Mutual Fund Performance: Higher Performance or Just Higher Risk Taking? (2009, neutral): “Chen et al. (2004) show that increases in funds’ sizes lead to declines in fund performance.”
Changing Names with Style: Mutual Fund Name Changes and Their Effects on Fund Flows (2005, neutral): “Third, Jayaraman, Khorana, and Nelling (2002) find significant changes in shareholder wealth and negative fund flows in the year after mutual fund mergers.”
Private Equity Performance: Returns, Persistence and Capital Flows (2005, neutral): “5 For related evidence for mutual funds, see Chen et al. (2003). 6 Interestingly, in the last several years, many of the top VCs have voluntarily returned large fractions of the committed capital in their most recent funds to their LPs, most likely because of concern over the effect of poor performa”
Liquidity, Investment Style, and the Relation between Fund Size and Fund Performance (2008, methodology): “Overall, consistent with Chen et al. (2004), I find strong and robust evidence of an inverse relation between fund size and fund performance.”
Mutual Fund Performance and Governance Structure: The Role of Portfolio Managers and Boards of Directors (2012, positive): “This is consistent with the results reported in Chen et al. (2004)—a strong diseconomy-of-scale in fund performance.”
The Interim Trading Skills of Institutional Investors (2011, background): “Although Berk and Green (2004) show that fund size is positively associated with skill, many empirical studies actually find evidence of a negative relation between fund size and performance (Chen et al. (2004), Yan (2008), KSZ (2008), Lewellen (2009), and Edelen, Evans, and Kadlec (2009)).”
Scale and Skill in Active Management (2014, methodology): “For example, Ferreira et al. (2013a,b) estimate a pooled OLS panel regression of fund performance on size, as in equation (1), while Chen et al. (2004) and Yan (2008) estimate the same pooled model using the Fama-MacBeth approach.”