Skip to main content

How much value should you expect to gain or lose by replacing your investment manager?

Buy Article:

$43.00 plus tax (Refund Policy)

Abstract:

Goyal and Wahal showed that plan sponsors typically lose value when firing an underperforming manager and hiring its replacement. Experience suggests that most investors appreciate this research but then ignore it when making decisions. To redress this problem, we build a model that shows an investor its expected loss from hiring and firing its managers for performance reasons. By knowing this likely loss, we hope that investors will make fewer performance-related decisions and therefore improve their returns. Another useful part of the model is that it can also project an investor's likely gain from ‘taking profits’ from a manager with exceptional outperformance.

Document Type: Research Article

DOI: https://doi.org/10.1057/jam.2012.10

Publication date: 2012-08-01

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more