@article {Abdesaken36, author = {Gerald Abdesaken}, title = {Following the Followers: Mutual Fund Performance When Managers Follow Analyst Coverage}, volume = {9}, number = {1}, pages = {36--48}, year = {2018}, doi = {10.3905/jii.2018.9.1.036}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Mutual fund managers who adjust portfolio holdings based on analyst coverage and consensus recommendations achieve signi?cantly lower risk-adjusted returns, but perform better than when consensus recommendations are considered alone. In a rational expectations equilibrium setup, an unskilled investor places greater weight on a risky asset{\textquoteright}s public signal, given an increase in the asset{\textquoteright}s analyst coverage. A new measure of managerial skill based on analyst coverage is formulated and shown to be decreasing in mutual fund alphas.TOPICS: Mutual fund performance, performance measurement}, issn = {2154-7238}, URL = {https://jii.pm-research.com/content/9/1/36}, eprint = {https://jii.pm-research.com/content/9/1/36.full.pdf}, journal = {The Journal of Beta Investment Strategies} }