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Dr Marco Navone


Marco Navone has been a Senior Lecturer in Finance at the UTS Business School since September 2011. Prior to this, he was an Assistant Professor in the Finance Department of Bocconi University in Milan (Italy). He is also a research fellow of CAREFIN the Center for Applied Research in Finance of Bocconi University and has been a visiting Assistant Professor in the Finance Department of Red McCombs School of Business of the University of Texas at Austin. Marco received his Ph.D. from Bocconi University, his teaching experience ranges from advanced equity portfolio management to financial economics and he has also a broad experience in executive education. Marco’s research on mutual funds and empirical corporate finance has been published in international journals such as the Journal of Banking and Finance and Financial Management. While in Italy Marco has acted as a consultant for a number of financial companies in matters of mutual funds’ performance measurement.

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Senior Lecturer, Finance Discipline Group
+61 2 9514 7736

Research Interests

Mutual funds and empirical corporate finance .

Can supervise: Yes


Navone, M. 2007, 'Principi di asset allocation e l'analisi del rischio' in Musile Tanzi (ed), Manuale del private banker, Egea, Italy, pp. 37-66.
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Navone, M. 2004, 'Diversifying market risk through market neutral strategies' in Gregoriou, G.N., Rouah, F. & Karavas, V.N. (eds), Hedge funds: Strategies, risk assessment, and returns, Beard Books, US, pp. 303-312.
Navone, M. 2004, 'L'individuazione del portafoglio ottimo per l'investitore' in Anderloni (ed), L'innovazione finanziaria. Osservatorio Newfin 2004, Bancaria Editrice, Italy, pp. 477-497.


Dahiya, S., Iannotta, G. & Navone, M. 2012, 'Firm opacity lies in the eye of the beholder', 2012 FMA Annual Meeting, Atlanta, Georgia, USA.
Navone, M. 2011, 'Investors' distraction and strategic repricing decisions', Financial Research Network Frontiers in Finance 2011 Annual Conference, Gold Coast, Australia.

Journal articles

Navone, M., Dahiya, S. & Iannotta, G. 2017, 'Firm Opacity Lies in the Eye of the Beholder', Financial Management.
Navone, M. & Nocera, G. 2016, 'Unbundling the Expense Ratio: Hidden Distribution Costs in European Mutual Fund Markets', European Financial Management, vol. 22, no. 4, pp. 640-666.
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Using data on more than 5,000 mutual funds domiciled in four European countries in 2006, we investigate whether distribution costs embedded into the expense ratio can be held responsible for the differences of expense ratios of mutual funds in different countries. We confirm the existence of relevant country effects in the pricing of mutual fund management services. Comparing load and no-load funds and using survey data on fee retrocession to the distribution channel, we provide evidence that these effects are heavily influenced by the cost of the distribution embedded in the expense ratio.
Navone, M. & Pagani, M. 2015, 'Brothers from different mothers how distribution fees change investment behavior', JOURNAL OF BANKING & FINANCE, vol. 51, pp. 12-25.
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Cardinale, M., Navone, M. & Pioch, A. 2014, 'The power of dynamic asset allocation', Journal of Portfolio Management, vol. 40, no. 3, pp. 47-60.
Iannotta, G. & Navone, M. 2012, 'The cross-section of mutual fund fees dispersion', Journal of Banking and Finance, vol. 36, no. 3, pp. 846-856.
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In this paper, we empirically analyze the factors affecting the cross section of mutual fund fee dispersion. In the context of equity mutual funds, fee dispersion stems primarily from the heterogeneity of products, clienteles and production functions. However, the relevant theory predicts that search costs can also generate fee dispersion. By controlling for observable sources of heterogeneity, we find that fee dispersion decreases with fund size and age, as well as with the amount of assets under management of the investment company. In addition, we find lower levels of fee dispersion for funds that charge marketing and distribution fees. Although we cannot rule out the possibility that these factors are a proxy for some unobserved source of heterogeneity, our results are also consistent with the theoretical prediction that search costs positively affect fee dispersion.
Navone, M. 2012, 'Investors' distraction and strategic repricing decisions', Journal of Banking and Finance, vol. 36, no. 5, pp. 1291-1303.
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In this paper I analyze investors reactions to changes in the expense ratios of equity mutual funds. I show that investment ?ows response to fees cannot be fully explained by looking at investors performance sensitivity. While performance sensitivity monotonically increases with past performance, price sensitivity does not: investors who buy top past performers seem to be ``distracted by the funds previous return and pay relatively little attention to the expense ratios. Moreover price sensitivity increases with fund visibility while performance sensitivity decreases, and while looking at data from 1986 to 2006 no discernible trend can be observed in the average performance sensitivity, price sensitivity strongly increases due to the dramatic increase in the availability of mutual funds information for retail investors. Finally I show that investment companies strategically time their repricing decisions in order to exploit time variations in price and performance sensitivities, and that fund governance quality affects the degree to which investment companies engage in this opportunistic behavior
Fu, R., Navone, M., Pagani, M. & Pantos, T.D. 2012, 'The determinants of the convexity in the flow-performance relationship', Journal of Index Investing, vol. 3, no. 2, pp. 81-95.
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There is substantial evidence that the flow-performance relationship of mutual funds is convex. The authors empirically investigate the determinants of such convexity. In particular, they study how fund fees (for example, marketing and nonmarketing fees) and the uncertainty related to the replacement option of fund production factors (investment strategies and managerial ability) impact the convexity of the flow-performance relationship. The evidence suggests that marketing fees are positively related to the convexity of the flow-performance relationship. Nonmarketing fees appear to have a negative impact on this convexity. Consistent with investment restrictions being relevant in explaining investors allocation decisions, sector and index funds exhibit lower convexity in their flow-performance relationship than respectively diversified and non-index funds. Finally, the dispersion of managerial abilities within a mutual fund segment is associated with higher convexity in the flow-performance relationship
Navone, M. 2012, 'Reprint of Investors' distraction and strategic repricing decisions', JOURNAL OF BANKING & FINANCE, vol. 36, no. 10, pp. 2729-2741.
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Navone, M. 2011, 'Investors' distraction and strategic re-pricing decisions'.
Forte, G., Iannotta, G. & Navone, M. 2010, 'The banking relationship's role in the choice of the target's advisor in mergers and acquisitions', European Financial Management, vol. 16, no. 4, pp. 686-701.
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The authors wish to thank Giacomo Nocera, Henri Servaes, and Angelo Russo and three anonymous referees for helpful comments and suggestions on earlier versions of this paper. The authors are grateful to the Centre for Applied Research in Finance (CAREFIN) of Bocconi University for providing financial support. Some of the work on this paper was completed while Giuliano Iannotta was visiting the Division of Research and Statistics of the Federal Reserve Board, whose hospitality is gratefully acknowledged. The views expressed in this paper are those of the authors and do not necessarily reflect those of the Board of Governors or members of its staff. All errors are those of the authors
Dragoni, D., Lazzari, V. & Navone, M. 2010, 'Mutual fund incentive fees: Determinants and effects', Financial Management, vol. 39, no. 1, pp. 365-392.
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We investigate the how and why of performance fee provisions in a free contracting environment such as the Italian mutual fund market until 2006. We find weak support for the hypothesis that these provisions emerge as an economically efficient solution in a rational asset management industry plagued by asymmetric information. They appear to emerge mainly as the product of strategic pricing by asset managers wishing to ease market competition, leverage on investors' sentiment, and hedge their cost structure. Alternatively, fears that managers may opportunistically alter funds' investment policies to maximize the option value embedded in the incentive provisions appear unjustified.
Iannotta, G. & Navone, M. 2008, 'Which factors affect bond underwriting fees? The role of banking relationships', European Financial Management, vol. 14, no. 5, pp. 944-961.
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The question of which factors are relevant in determining bond underwriting fees is empirically investigated by analysing 2,202 bond issues completed by European firms during the 1993 2003 period. Four major results emerge from the analysis. First, the introduction of the single currency in 1999 has generated an increase in competition among banks, and, as a result, a reduction in underwriting fees. Second, a strong relationship with the issuer's main bank reduces the level of underwriting fees. Third, new issuers are charged with lower underwriter fees relative to firms that have completed issues without building any strong relationship with a bank. Fourth, higher reputation banks charge lower underwriting fees. The implications of these findings are also discussed.