Industry Selection for Fund Asset Allocation and Fund Performance: New Evidence about the Investment Ability of Fund Managers

Active fund managers can exhibit their investment ability through stock selection,market timing and industry selection.Portfolio industry concentration can reflect the industry selection behavior of fund manager.The empirical analysis on the open-end equity fund in China shows that fund manager's active selection of portfolio industry allocation can not bring about better fund performance.Thus fund managers have no industry selection ability.Moreover,the analysis by applying the Grinblatt and Titman's GT measure to individual fund do not support that managers have industry selection ability.