Squandering Home Field Advantage? Financial Institutions' Investing in Their Own Industries

28 Pages Posted: 7 Dec 2017

See all articles by Aneel Keswani

Aneel Keswani

Faculty of Finance, Cass Business School, City University, London

David Stolin

Toulouse Business School - Economics and Finance

Date Written: July 1, 2015

Abstract

In the extensive debate about investment professionals’ ability to add value, there has been scant evidence on the role played by industry expertise. To shed light on this issue, we study own-industry investing. Specifically, we analyze how well individual mutual funds as well as mutual fund companies, banks and insurance companies invest in the shares of listed companies in the mutual fund, banking and insurance industries, respectively. We find little evidence that such inherent industry knowledge enhances these institutions’ ability either to time the investment in their industry as a whole or to select individual stocks within it.

Suggested Citation

Keswani, Aneel and Stolin, David, Squandering Home Field Advantage? Financial Institutions' Investing in Their Own Industries (July 1, 2015). Journal of Financial Perspectives, Vol. 3, No. 2, 2015, Available at SSRN: https://ssrn.com/abstract=3083600

Aneel Keswani (Contact Author)

Faculty of Finance, Cass Business School, City University, London ( email )

106 Bunhill Row
London EC1Y 8TZ
Great Britain
+44 207 040 8763 (Phone)

David Stolin

Toulouse Business School - Economics and Finance ( email )

20, bd Lascrosses - BP 7010
Toulouse Cedex 7, 31068
France

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
31
Abstract Views
771
PlumX Metrics