CFA, MBA or Both: Further Evidence on Mutual Fund Performance

Abstract

This study examines mutual fund performance by using a distinct method to identify and measure fund managers’ educational and professional qualifications at a fund level irrespective of managerial turnover. Fund performance is measured by eight Morningstar variables which are more practitioner focused and easily accessible to investors. Empirical results document that funds with a higher intensity of managers’ qualifications underperform. There is a statistically significant performance difference between managers with either a CFA designation or an MBA degree (or both) and managers without any of these attributes. Managers with an MBA degree perform moderately better than managers with a CFA designation. These findings are robust to fund sizes, fund styles, different performance metrics, and methodologies used.