@article {Dongjwm.2020.1.098, author = {Feng Dong and John A. Doukas}, title = {Did Fund Managers Deliver Value During the Financial Crisis?}, elocation-id = {jwm.2020.1.098}, year = {2020}, doi = {10.3905/jwm.2020.1.098}, publisher = {Institutional Investor Journals Umbrella}, abstract = {This study provides evidence that individual investors are better off by investing through mutual funds run by skilled fund managers, who not only deliver higher risk-adjusted returns in normal times, but also attain similar performance even during turbulent economic states, such as the 2007{\textendash}2009 global financial crisis. Specifically, we show that, on average, fund managers with the highest skill (top 20\%) added $6.877 million of value annually during the early crisis period and $4.065 million of value during the late crisis period, compared with $3.198 million gain realized during the entire sample period. Low-skill fund managers (bottom 20\%), however, lost $0.844 million of value during the early crisis period and $5.323 million of value during the late crisis period.TOPICS: Performance measurement, manager selection, wealth managementKey Findings{\textbullet} Active managed mutual funds with skilled managers can serve an important insurance and value generating function not only during normal times, but also in extreme economic downturns. {\textbullet} Funds run by skilled managers experienced significant capital inflows during both the early and late stages of the financial crisis, while their low skilled counterparts incurred significant capital outflows.{\textbullet} Fund management skill persists at least one year during the whole financial crisis period.}, issn = {1534-7524}, URL = {https://jwm.pm-research.com/content/early/2020/02/21/jwm.2020.1.098}, eprint = {https://jwm.pm-research.com/content/early/2020/02/21/jwm.2020.1.098.full.pdf}, journal = {The Journal of Wealth Management} }