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http://hdl.handle.net/2451/26472
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| Title: | An analysis of the relative performance of Japanese and foreign money management |
| Authors: | Brown, Stephen J.
Goetzmann, William N.
Hiraki, Takato
Shiraishi, Noriyoshi |
| Issue Date: | 25-Sep-2002 |
| Series/Report no.: | FIN-02-028 |
| Abstract: | Foreign investment management firms have recently started to play a
major role in the investment trust business in Japan. In terms of assets
under management, their size and market share have almost doubled in the
past several years. In part, the relative success of foreign managed
firms in attracting market share may be attributed to the fact that
Japanese investment trusts have underperformed benchmarks in quite a
dramatic fashion over the past two decades. This is at best indirect
evidence that Japanese funds under perform their foreign counterparts.
In a recent paper (Brown, Goetzmann, Hiraki, Otsuki and Shiraishi 2001)
we show that the under performance can be attributed almost entirely to
the unique tax environment of Japanese investment trusts, which had the
effect of heavily penalizing early withdrawals. The relaxation of these
regulations coincided with a major inflow of new money into the
investment trust business. We examine the relative performance of
Japanese and foreign investment management firms before and after this
change in tax regulations, and find that the poor relative performance
of Japanese funds from April 2000 through December 2001 may in part be
attributed to the huge inflow of new money into this sector and the
style shifts made necessary to accommodate this flow. |
| URI: | http://hdl.handle.net/2451/26472 |
| Appears in Collections: | Finance Working Papers
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