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Raghavendra Rau

Raghavendra Rau

Working papers

Hedge fund performance
Do hedge fund managers manage beta risk?

Mutual funds
Do mutual fund investors chase false returns?

Published papers

Changing names with style: Mutual Fund name changes and their effects on fund flows, JF
Good stewards, cheap talkers, or family men? The impact of mutual fund closures on fund managers, flows, fees, and performance, RFS

Changing names with style: Mutual Fund name changes and their effects on fund flows
with Michael J. Cooper and Huseyin Gulen
Krannert School of Management, Purdue University, and Virginia Tech
Journal of Finance, 60, 2825-2858, 2005.

Good stewards, cheap talkers, or family men? The impact of mutual fund closures on fund managers, flows, fees, and performance with Arturo Bris, Huseyin Gulen and Padma Kadiyala
IMD, Virginia Tech and Pace University
Review of Financial Studies, 20, 953-982, 2007.

We examine a sample of 125 equity mutual funds that closed to new investment between 1993 and 2004. We find that funds close following a period of superior performance and abnormal fund inflows. Fund managers raise their fees when they close to compensate managers for losses in income due to the restrictions in size imposed by the fund closure decision. Managers reopen when fund size declines. However, they do not earn superior returns after re-opening, suggesting that the fund closure decision does not provide information about superior fund managers.