This paper studies information flows within mutual fund families by analyzing investment decisions of equity funds and corporate bond funds on the same firm’s assets. We find that funds linked within a mutual fund family (sister funds) exhibit a significant co-movement in holdings of commonly-held firms’ equities and bonds (cross-holdings). In contrast, we do not find such a pattern for randomly matched equity and bond funds that also hold the same firm’s assets but belong to different fund families (stand-alone funds), suggesting that the holding co-movement is driven by information sharing among sister funds. We show that sister funds make more profit-enhancing investment decisions on their cross holdings relative to stand-alone funds. Our findings suggest that enhancing collaboration between equity funds and bond funds help improve the performance of fund families. 

Keywords: information synergy, mutual fund families, equity fund, bond fund, market segmentation
JEL classification: G11, G20, G23, G31.​