Invest Skeptically

Duncan Hood writes, “Steal this column,” in Canadian Business Online. He refers to a research paper that suggests copycat funds — that simply mimic mutual funds at each public disclosure (funds have to release their holdings at least semi-annually) — can yield similar returns to the mutual funds they copy, and, in the case of high MER funds, even beat them. Hood suggests using this information to follow what your favourite investors are doing.

The paper he cites is called, Copycat Funds: Information Disclosure Regulation and the Returns to Active Management in the Mutual Fund Industry, by Mary Margaret Frank, James M. Poterba, Douglas A. Shackelford, and John B. Shoven, and published in, The Journal of Law and Economics, volume 47 (2004), pages 515–541.