Capture Managerial Skills from Mutual Fund Managers' Frequent Replacement

Mutual fund managers' frequent replacement implies fund companies' recognition to their skills. In order to capture this kind of managerial skills, we put forward two propositions: performance persistence is stronger in large fund and fund abnormal return is negatively correlated with managerial tenure. Using a panel of 96 actively managed Chinese equity funds, we document evidence consistent with our hypotheses that managerial skills do exist among mutual fund managers. Our empirical results also suggest Chinese mutual funds display short-term performance persistence.