Speed Of Information Diffusion Within Fund Families College of William and Mary - Mason School of Business Stefan Jaspersen University of Cologne - Centre for Financial Research (CFR) Alexander Kempf University of Cologne - Department of Finance & Centre for Financial Research (CFR) July 21, 2015 Abstract: We document that the speed of information dissemination within mutual fund families positively affects the performance of member funds. This suggests that the resulting benefits of higher information precision far outweigh free-riding costs associated with fast internal dissemination. The performance effect intensifies when information travels across managers from different rather than same styles. This is consistent with fast information diffusion aggregating complementary insights that sharpen information precision, but also with fewer free-riding opportunities among managers from different styles. Managers exploit the resulting higher information precision rationally by trading more, relying less on public information, and investing differently from unaffiliated peers. Speed Of Information Diffusion Within Fund Families - Introduction Timely dissemination of information within organizations is important. For example, in a typical corporation, it can have a positive effect by increasing efficiency of supply chain management, shortening product development cycles, and improving... More