The Effect of Market Timing Ability and Fund Size on Mutual Fund Performance of Mutual Fund Companies in Indonesia

Mochammad Arif Budiono,Musdalifah - Azis

doi:10.47312/aefr.v5i01.452

Abstract

<p align="justify"><em>This study aims to analyze the effect of market timing ability and fund size of mutual funds on the performance of equity funds. This research was conducted at a mutual fund company registered in the Financial Services Authority (OJK) 2018-2019 period. This study uses purposive sampling with a total sample of 65 mutual fund shares. The type of data used is quantitative data and data sources in the form of company annual financial statements. Data analysis tools used are descriptive statistics and panel data regression. The results of this study indicate that the market timing ability has a significant positive effect on the mutual fund performance and the fund size has a significant negative effect on the mutual fund performance.</em></p>

Highlights

In the mutual fund industry, we often hear the term NAV
This study aims to analyze the effect of market timing ability and fund size of mutual funds on the performance of equity funds
The results of this study indicate that the market timing ability has a significant positive effect on the mutual fund performance and the fund size has a significant negative effect on the mutual fund performance

Summary

Introduction

In the mutual fund industry, we often hear the term NAV. NAV stands for Net Asset Value which shows how much the value of assets managed in a mutual fund is. Mutual fund performance is defined as a portfolio that looks at the rate of return generated by the portfolio, and has to consider other factors such as fund size, market timing, securities portfolio analysis and portfolio risk level (Ünal & Tan, 2015). In this case, a mutual fund company's performance directly affects matters related to fund management by investment managers (Ferson & Mo, 2016). The total value of net assets (NAV) along with the number of units produced by all types of mutual funds in Indonesia has increased from year to year. In investing in mutual funds, an investor needs to understand portfolio management carried out by investment managers. Chang & Lewellen (1984) explained that to determine the performance of a good stock mutual fund, there are several variables that can be considered for investors in investing, one of which is market timing ability

Objectives

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Conclusion