TY - JOUR T1 - Performance Characteristics of Individually-Managed versus Team-Managed Mutual Funds JF - The Journal of Portfolio Management SP - 110 LP - 119 DO - 10.3905/jpm.2008.706248 VL - 34 IS - 3 AU - Richard T. Bliss AU - Mark E. Potter AU - Christopher Schwarz Y1 - 2008/04/30 UR - https://pm-research.com/content/34/3/110.abstract N2 - The fields of psychology and sociology offer a large body of theory and evidence on how individual behavior differs from group behavior, particularly for performance and risk-taking activities. Relatively little attention, however, has been devoted to this topic in regard to managed portfolios, even though over 50% of mutual funds are managed by a team. In this article, the authors provide an empirical examination of whether funds managed by individuals perform differently from funds managed by teams. Using a sample of about 3,000 equity mutual funds over a 12-year horizon, the authors find that although the number of funds managed by teams has grown at seven times the rate of funds managed by individuals, no significant difference in risk-adjusted performance is observed between team-managed and individually managed funds. Funds managed by teams, however, are significantly less risky and exhibit lower turnover. In addition, the total cost of owning a team-managed mutual fund is, on average, nearly 50 bps lower per year than the cost of owning an individually managed mutual fund. Finally, team-managed funds attract significantly greater investor flows than individually managed funds, even after controlling for performance, risk, and expenses.TOPICS: Mutual fund performance, portfolio construction, exchanges/markets/clearinghouses ER -