Fund trading divergence and performance contribution

Considering that the most distinct trading decisions are crucial to evaluate ability of fund managers add value, this paper aims examine divergence level among mutual funds and capture its determinants performance consequences. We propose a measure is more informative than traditional overlap metrics, providing evidence positive significant trend over time, especially after Global Financial Crisis (GFC) 2008. Our results also show negative influence market stress on level. Interestingly, we find greater contribution subsequent in divergent portions decisions.