Superior fund managers capture value, leaving investors with normal returns.
The article examines Australian equity mutual funds and how fund size affects their performance. It suggests that superior fund managers in the industry capture the value they create, leaving investors with a normal return. Factors like previous returns, fund age, and management costs influence the cash flow into a fund over time. The study analyzed data from Australian Morningstar equity funds from 1995 to 2005, finding some support for these predictions.