Domestic Funds Research Articles

Exploring the Implementation of Business Process Reengineering in Banks

The changing dynamics of banking and business environment forced banks to re-engineer their operational process for fantastic business performance. The bank operational process which is intended to meet emerging challenges of bank consolidation, operating cost containment, improvement of customer service and increase revenue call for innovative banking practices through Business Process Re-engineering. This is to enable Nigerian banks to incorporate strategic innovative customer schemes in order to bridge the service gap inherent in a Nigerian banking sector. The broad objectives of this study are: 1) to determine the current status of an operational process reengineered in the Nigerian banks; and 2) To determine the most organizational objective of BPR implementation in Nigerian banks. Self- delivery and collection of data strategy with help of research assistants were used to in this study. Out of 560 questionnaires distributed to the sampled banks, 417 were returned representing 74% rate. First, the study found that Nigerian banks surveyed have re-engineered their branch operations, customer services, cash tellering services, cheque's clearing, domestic fund transfer, loan processing, credit administration and appraisal. In addition, 21.3% of the banks surveyed have reengineered their services with respect to foreign operations, process for letter of credit, Western Union/MoneyGram money payment and wire transfer to a fund through SWIFT and other electronic channels. Second, the result showed that 24.7% of the surveyed banks agreed that enhancement of profit is the most objective of BPR implementation. These followed closely by 23.3% of the surveyed banks that are of the opinion that improvement over the quality of customer service is the most objective of BPR adoption. Furthermore, 20.4%, 11.5% and 12.9% of the survey banks are of the opinion that organisation objective of BPR adoption was to either be proactive, reactive for future/current challenges, competitive pressure being faced as a result of globalization and deregulation of the financial sector or to reduce operating cost respectively. The outcome from this study provides important insights to both managers and researchers for further understanding about the objectives of BPR adoption, and the operational processes reengineered by the banks. The necessary suggestions on new area of research were recommended for future study.

Assessment of window dressing using fund returns and portfolio holdings

This paper presents the analysis of the monthly portfolio holdings and daily returns of a large sample of Spanish domestic equity funds to test the potential manipulation of portfolios in mandatory reports. The comparison between the return of the fund portfolio holdings and the observed fund return reveals that only a low percentage of filings may be classified as window-dressed portfolios. These portfolios are dispersed across funds and fund managers, but they are clustered over three specific quarters that coincide with bear market months. The results seem to indicate that although window dressing is not a widespread practice in the Spanish market, there is evidence to suggest that mutual funds employ this trading strategy as a response to poor past performance.

Modeling and simulation of the open-end equity mutual fund market in Taiwan by using self-organizing map

This research applies artificial intelligence (AI) of unsupervised learning self-organizing map neural network (SOM-NN) to establish a model to select the superior funds. This research period is from year 2000 to 2010 and picks 100 domestic equity mutual funds as study object. This research used 30days prior to the beginning of each month’s prior 30days, 60days, 90days on fund’s net asset value and the Taiwan Weighted Stock Index (TAIEX) return as the fund’s relative performance evaluation indicators classified by month. Finally, based on the superior rate or the average return rate, this research select the superior funds and simulate investment transactions according to this model.The empirical results show that using the mutual fund’s net asset value and the TAIEX’s relative return as SOM-NN input variables not only finds out the superior fund but also has a good predictive ability. Applying this model to simulate investment transactions will be better than the random trading model and market. The experiments also found that the investment simulation of a three-month interval has the highest profitability. The model operation suggests that it is more suitable for short-term and medium-term investment. This research can assist investors in making the right investment decisions while facing rapid financial environment changes.

Foreign Investment in India Through Indian Mutual Funds

Foreign investors will now be able to access India's equity and infrastructure debt markets by buying units of rupee denominated Indian mutual funds. In a joint move by India's Ministry of Finance, the Reserve Bank of India (RBI), and the Securities and Exchange Board of India (SEBI) the rules affecting foreign investment in domestic mutual funds have been significantly liberalized. A QFI will be allowed to hold the Indian mutual fund's units directly in a dematerialized account opened with a SEBI registered depository participant. Alternatively, a QFI may elect to hold the Indian mutual fund's units indirectly, though a type of depository receipt - called a unit confirmation receipt (UCR). These UCRs will be issued by overseas issuers that will be appointed by the concerned Indian mutual funds. The author deals with procedure for investment through mutual funds. Lastly, he concludes with pros and cons of foreign direct investment through mutual fund in India.

Why Do Closed-End Bond Funds Exist? An Additional Explanation for the Growth in Domestic Closed-End Bond Funds

AbstractThis paper provides a new explanation for why closed-end bond funds coexist along with otherwise identical open-end bond funds. Closed-end bond funds offer investors the opportunity to leverage their fixed income investment at very low borrowing rates and are attractive to investors for this reason. We find that differences in leverage are reflected in the discount on closed-end bond funds in a manner consistent with the advantage of leverage.

Estimating performance aspects of Greek equity funds with a liquidity-augmented factor model

The present study, employing a survivorship-bias free dataset, assesses the performance of Greek domestic equity funds during the period June 2001–December 2009 controlling for the thin trading risk that is inherent in the Greek stock market. Augmenting Carhart's multi-benchmark model (1997) with a stock-level liquidity factor, we document the absence of skills among domestic equity fund managers. However, at a fund level, we detect the evidence of a statistically and economically significant outperformance. Additionally, we examine the relationship between fund performance and a series of cost and operational attributes employing a robust quantile regression method. Cross-sectional results demonstrate a significant inverse relationship between fund performance and expenses. Moreover, our findings show that the larger the fund, the lower the performance.

A Concentration Analysis of Domestic Equity Mutual Funds

This study examines the stock picking and market timing abilities for concentrated equity funds. We also investigate whether the characteristics of concentrated equity funds influence fund performance and whether these funds maintain performance persistence. The major results are as follows. Concentrated equity funds have superior stock picking abilities. The concentrated equity funds usually have larger scale effect. The expense rates of concentrated equity funds positively influence the fund performance, and these funds usually have smaller expense impact on fund performance than do diversified equity funds. The concentrated equity funds have a larger proportion of positive performance persistence.

Dividends Received by Investment Funds: An EU Law Perspective – Part 2

This article examines the cross-border taxation of dividends received by equity funds. In particular, the author examines the issue of discrimination and the related analysis of whether or not domestic and foreign funds are in a comparable situation. In Part 1, published in European Taxation 2/3 (2013), the author examined ECJ and EFTA Court decisions in this area. Part 2 analyses ECJ guidelines and the author's own approach to the comparability analysis and the concept of fiscal coherence.

Do mutual fund managers exploit the Ramadan anomaly? Evidence from Turkey

Recent literature shows that the holy month of Ramadan exerts a positive influence on investor sentiment in predominantly Muslim countries. This anomaly has been found to be particularly pronounced in Turkey. We therefore examine whether mutual fund managers investing in Turkish stocks are able to benefit from the Ramadan effect. We find that risk-adjusted performance of domestic institutional funds, hybrid funds and foreign Turkish equity funds is substantially higher during Ramadan compared to the rest of the year. By contrast, domestic index funds fail to deliver higher abnormal returns as they are adversely affected by increased money inflows during Ramadan.

VC/PE Funds, Government Grants and Innovation in Newly Public Firms

We highlight the circular relationship between venture capital and private equity (VC/PE) investment, R&D grants, and innovation. We focus on Australia, which has low levels of innovation and VC/PE activity, but has a comparable legal environment to other developed, but high innovation markets. We show that government grants encourage VC/PE investment and that VC funds and government grants increase both innovation inputs (R&D) and outputs (patents and citations) in newly public firms. Buyout funds only increase outputs, and large funds and domestic funds are best able to induce innovation outputs. This highlights the importance of both grant schemes and VC/PE investment to innovation.

Dividends Received by Investment Funds: An EU Law Perspective – Part 1

This article examines the cross-border taxation of dividends received by equity funds. In particular, the author examines the issue of discrimination and the related analysis of whether or not domestic and foreign funds are in a comparable situation. In Part 1, the author examines ECJ and EFTA Court decisions in this area. Part 2, to be published in European Taxation 4 (2013), analyses ECJ guidelines and the author’s own approach to the comparability analysis and the concept of fiscal coherence.

Mutual Fund Investments, FII Investments and Stock Market Returns in India

Exploring the dynamic interaction between investment flows of mutual funds and foreign institutional investors (FIIs), based on post-crisis data, this study finds a strong negative relationship between the net investments by these two classes of institutional investors. Domestic mutual funds are found to determine their investment flows on the basis of their own previous investments, FII investments as well as market returns. The analysis suggests that the effect of stock market returns can be overshadowed by the effect of FII investments, in determining mutual fund flows. The study also finds evidence of net investments by FIIs having a causal influence on stock market returns even as it fails to identify any causal relation between domestic mutual funds’ net investments and domestic stock returns. The conservative and contrarian pattern of mutual fund net investments in equity markets, as brought out by this study, indicates why equity mutual funds, as a group, have not provided a strong domestic alternative to foreign flows in the Indian stock market.

Will overseas mutual funds never be a good stakeholder? Evidence from the US energy-sector funds

Drawing on social movement theory, we explain whether the origin of mutual funds affect social action against the environmental performance of local firms in the country of investment destination and under what condition they serve more like a environmentally conscious stakeholder. Using 220 overseas and the US domestic mutual funds in energy sector, we found that overseas mutual funds more invest in the local firms having lower environmental performance than do domestic mutual funds, but higher recent fund returns lead overseas mutual funds to sort out the local firms having lower environmental performance.

Ratio analysis of actual business performance of open investment funds in Serbia

The subject of this paper is to analyze the performance of open investment funds in Serbia in the period of 2007 to 2013. By applying Jensen's alpha, Sharper and Sortino ratio it was found that the performances of domestic investment funds are unsatisfactory. Review of investment funds operations is based on the returns they bring and the risks they accept in the business. In Serbia, the equity funds, as the most risky funds, started to operate in 2007, while cash funds (as the least risky funds) were introduced in later phase after 3 years. At the moment there are 16 open investment funds (on 02/28/13), where value growth and value maintenance funds dominate. A total net asset of open investment funds is 2,324 million Dinars i.e. 20 million Euros (at the end of 2012).

“A Study on Magnum Equity Fund” At SBI Mutual Fund Tirupati

FIRST Phase (19964-87)-UTI all the way This phase begin with the inception of the Unit Trust of India (UTI). It remained the only mutual fund player in the country till 1987. UTI started its operations in July 1964 “with a view to encouraging savings and investment and participation in the income, profits and gains accruing the corporation from the acquisition, holding, management and disposal of securities”. In short, it was set up by the Indian Government with a view to augments small savings in the country and to channelize these savings to the capital markets. UTI witnessed a slow and steady growth over the 1970s and 1980s and by the end of 1988 it had an Asset under Management (AUM) of Rs.6, 700 crore. It still continues to be the largest player in the domestic mutual fund industry with an AUM of Rs. 23,500 crore as on March 31, 2005.

Soviet Foreign Trade and the Money Supply

This study uses newly available data in a quantitative examination of the relationship between Soviet special foreign trade earnings (SFEs) and changes in the money supply. During the Soviet era, SFEs were effectively taxes on imports and exports. They generated as much as 7-15% of state budget revenues in the 1970s and 1980s. The results show that changes in net foreign assets and the money supply accounted for around 10% of SFEs. The remaining 90% of SFEs involve redistribution of existing domestic funds within a constellation of government agencies and state-owned enterprises. The lack of data precluded further exploration of this redistribution.

The Efficiency of Active Asset Allocation Funds in the Period of Instability at Financial Markets

Abstract The objective of the hereby paper is the assessment of domestic active asset allocation funds efficiency in the period of 2007-2012, including the comparison of earned return rates against the return rates obtained by other mixed funds, as well as WIG and WIG20 stock exchange indices. Additionally, the purpose of the paper is to analyse the investment policy applied by the above listed funds, carried out based on records included in adequate information prospectuses, and also having considered the investment portfolio compositions presented in annual and 6-month financial reports covering these funds. The assessment of applied investment strategies efficiency is performed based on 12-, 24-, 36-, 48- and 60- month return rates set at the end of 6-month reporting periods. The analysis covered only domestic open-end active asset allocation investment funds included in this group following the definition accepted by Analizy Online investing assets in financial instruments issued by entities, officially seated in Poland or outside Poland and valuating participation units in PLN, which have been operating for at least 24 months from the day of 30th June 2012.

Performance of Exchange-Traded Funds in India

The concept of Exchange-Traded Funds (ETFs) is very popular in foreign countries, but in India, it is still in theinitial growth phase. This research paper examines the characteristics and growth pattern of all the 82 exchangetraded schemes floated and traded on Indian Stock markets, and evaluates their performance using DataEnvelopment Analysis (DEA). On an average, ETFs grew at 37% annually during the period 2006 -2011in India.These funds consistently outperformed the market index and generated higher returns. ETFs generated excessreturns of 3% p.a. as against CNX NIFTY, which is the Indian equity market bench mark. Gold ETFs provided13% excess returns as compared to the returns on the equity market and attracted large investments in the postfinancial crisis years. Data Envelopment Analysis ranked domestic and overseas fund of funds as efficient funds,which were floated by foreign Asset Management Companies (AMCs) and the AMCs with Joint Ventures inIndia. Among the foreign AMCs, Franklin Templeton was found to offer the most efficient fund. These efficientfunds are found to have higher Sharpe ratios, indicating that the DEA ranking is in broad consensus with theevaluation done using Sharpe ratios. However large funds were not found to be efficient funds. This infers that thefund size does not indicate superior performance.

Forecasting Stock Returns Through an Efficient Aggregation of Mutual Fund Holdings

We develop a stock return--predictive measure based on an efficient aggregation of the portfolio holdings of all actively managed U.S. domestic equity mutual funds, and use this model to study the source of fund managers' stock selection abilities. This generalized inverse alpha (GIA) approach reveals differences in the ability of managers to predict firms' future earnings from fundamental research. Notably, the GIA's return-forecasting power is not subsumed by publicly available quantitative predictors, such as momentum, value, and earnings quality, nor is it subsumed by methods shown in past research to forecast stock returns using fund holdings or trades. The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.

Who Ran on Repo?

The sale and repurchase (repo) market played a central role in the recent financial crisis. From the second quarter of 2007 to the first quarter of 2009, net repo financing provided to U.S. banks and broker-dealers fell by about $900 billion – more than half of its pre-crisis total. Significant details of this “run on repo” remain shrouded, however, because many of the providers of repo finance are lightly regulated or unregulated cash pools. In this paper we supplement the best available official data sources with a unique market survey to provide an updated picture of the dynamics of the repo run. We provide evidence that the run was predominantly driven by the flight of foreign financial institutions, domestic and offshore hedge funds, and other unregulated cash pools. Our analysis highlights the danger of relying exclusively on data from regulated institutions, which would miss the most important parts of the run.