Fund managers manipulating portfolios for personal gain negatively impact fund performance.
The article explores how changing fund managers can affect the performance of mutual funds. It suggests that when fund managers switch to other funds, the performance of those funds tends to decrease. This is because managers may manipulate short-term results to maintain their reputation and secure better compensation contracts. The study uses real-world data to show that funds perform worse after a manager leaves compared to when the manager stays. This highlights the importance of understanding how fund managers' actions can impact investment outcomes.