Tyler Cowen, Columnist

Disadvantage Gives Fund Managers an Advantage

Those born poor get better returns. (Those born rich get promoted.)

August 31, 2016 at 11:00 AM UTC

Tyler Cowen is a Bloomberg Opinion columnist, a professor of economics at George Mason University and host of the Marginal Revolution blog.

Beware.
Photographer: Matthew Lloyd/Getty Images

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We all know that family background matters, but the connections are sometimes surprising.

For instance, new evidence on mutual fund managers suggests that the managers from poorer backgrounds beat the performance of wealthier peers. And it’s not a small effect: Managers from families in the bottom quintile of wealth appear to outperform those from families in the top quintile by 2.16 percent a year, in risk-adjusted terms.