Fund Performance Research Articles

Lottery‐like features and mutual fund performance‐flow sensitivity

AbstractWe show that mutual funds' lottery‐like features weaken the performance‐flow sensitivity, particularly among low‐performing funds, thereby contributing to the convexity of the fund performance‐flow relation. The results hold when different model specifications are used to test the fund performance‐flow relation, are robust to alternative measures for funds' lottery‐like features, and cannot be attributed to fund search costs, marketing efforts, or fund performance volatility. Utilizing retail trading data at the account level from a large brokerage firm, we offer additional evidence that funds' lottery‐like features significantly reduce outflows for low‐performing funds. It confirms that the weakened performance‐flow sensitivity among low‐performing funds with lottery‐like features is driven by existing investors' reluctance to redeem their shares. Furthermore, we reveal that fund managers can cater to investors' gambling preference by tilting fund portfolios toward lottery‐type stocks. Funds' lottery‐like features, however, aggravate future fund performance, especially among those that have already underperformed in the past.

Strategy implementation practices and Performance of State Corporations: Case of National Health Insurance Fund, Nairobi City County, Kenya

Many organizations in developed and developing countries and more specifically in Kenya are striving to perform, it is noted that issues of strategy implementation has continued to be uncertain in the Kenyan public sector. Many state-owned corporations are grappling with management problems which have led to their poor performance outcome. The National Health Insurance Fund is a state corporation through National Health Insurance Fund Act No. 9 of 1998. The Fund’s core mandate is to provide social medical insurance cover to all its members and their declared dependents (spouse and children). But according to National Health Insurance Fund Performance Report 2017- 2018, the National Health Insurance Fund has continued to implement social health strategies with a view to achieving Universal Health Coverage for the benefit of all Kenyans. The aim of the study was to examine the strategy implementation practices influencing the performance of state corporations in Kenya, specifically the National Hospital Insurance Fund. The study was grounded on Organizational Higgins’s Eight S Model, the Balanced Scorecard model, and Resource Based View theory. The study employed a descriptive research design. The study population consisted of 411 employees, managers, and patients from the National Health Insurance Fund headquarters. Questionnaires were used to collect primary data, and a pilot test was performed to assess the reliability and validity of the questionnaire. Cronbach’s Alpha coefficient was employed to determine the reliability of the research instrument. Data analysis involved the use of descriptive statistics, supported by the Statistical Package for Social Sciences (SPSS), to calculate frequencies, percentages, means, and standard deviations. A Multiple Linear Regression model was used to determine the influence of independent variables on the dependent variable. The study findings revealed that technological innovation, strategic resource planning, strategic leadership and strategy monitoring had positive and significant effects on the performance of the National Health Insurance Fund in Kenya. This study concluded that strategy implementation factors, including technological innovation, strategic resource planning, strategic leadership, and strategy monitoring, play a significant role in firm performance. The study recommends that the management of the organization should emphasize strategy implementation to improve the performance of their organization. Additionally, continuous investment in technological innovation, effective strategic resource planning, strategic leadership development, and robust strategy monitoring practices should be prioritized to enhance overall organizational performance.

APPLICATION AND PERFORMANCE OF PENSION FUND IN REAL ESTATE INVESTMENT FINANCING IN NIGERIA

This study aimed at determining the effects of the application of real estate investment instruments on the performance of pension fund in real estate investment financing in Nigeria with the view of making recommendations for improved investing. The two real estate investment instruments studied were Real Estate Investment Trusts (REITs) and investing in Direct Real Estate Property (DREP). Three objectives were set to achieve this aim. First, to determine the application of real estate instruments in the investing of pension fund in Nigeria. Second, to determine the performance of pension fund in real estate investment financing in Nigeria. Third, to establish the relationship between application of real estate investment instruments and performance of pension fund in real estate financing in Nigeria. Secondary data from National Pension Commission (PenCom) was used to do this research and the study period was 2012 to 2021. Data were analysed using percentages and Multiple Regression Analysis. Findings showed that, the application of the investment instruments is poor with REIT and DREP asset classes having respective averages of 0.064% and 0.009%. Findings showed that, the performance of pension fund in real estate financing is poor with the average of 13.15%. The regression result showed that, the application of REIT has negative relationship with performance while that of DREP has positive relationship with correlation coefficients of –0.543 and 0.794 respectively. Based on findings it is concluded that, REIT asset class impacted negatively on performance while DREP asset class impacted positively. For there to be improved participation of pension fund in real estate financing it is recommended that, there must be increased investments in REIT and that, the range of investments in DREP should be maintained or most pleasantly increased. For there to be improved investing, it is further recommended that more real estate investment instruments be introduced.

Performance of Closed-Ended Mutual Funds: A Test of Market Efficiency

Background: Mutual funds, known for aggregating funds from a diverse investor base, play a crucial role in managing small funds smartly. This study evaluates the performance of selected closed-ended mutual funds and examines market efficiency in Nepal. Methods: Using a descriptive and casual-comparative research design, the study spans forty-eight months from January 15, 2018, to January 14, 2022. Monthly data from five mutual funds are analyzed, with metrics such as the Treynor ratio, Sharpe ratio, and Jensen alpha. The study variables include market returns, assets, expense ratios, fund age, liquidity, and mutual fund returns. Various statistical tests, including correlation analysis, Integrated Ranking Analysis, ANOVA test, t-test, and P-value tests, are conducted to determine the significance and statistical relevance of the study variables. Results: The findings reveal that mutual fund performance is influenced by factors such as return, age, liquidity, asset, and expense ratio. Expense ratio and age emerge as the most impactful factors, demonstrating a statistically significant relationship with market return (p < 0.05). All selected mutual funds outperform the market return (NEPSE), with Sanima Equity Fund securing the top rank in all three measures. Conclusion: The Sharpe ratio, Treynor ratio, and Jensen alpha measures for mutual funds surpass those of the market, indicating market inefficiency in its semi-strong form. Novelty: This study uniquely evaluates closed-ended mutual funds using comprehensive performance metrics, demonstrating their significant outperformance compared to market benchmarks. It underscores their effectiveness in actively managing passive funds and challenges the efficient market hypothesis.

Factors Influencing Financial Performance of Self-Managed Microfinance Funds in Arusha

The study investigates factors affecting the financial performance of Self-Managed Microfinance Funds (SMMFs) in Arusha, Tanzania, with a focus on their role in urban economic empowerment. The study adopted a pragmatic research philosophy suited to the study's focus. Using a descriptive research design, the study sampled 50 employees from SMMFs, employing both quantitative and qualitative data collection through questionnaires, interviews, and financial reports. A multi-sampling technique was employed, involving purposive identification of the population, followed by simple random stratification, and finally, convenient sampling for data collection. Key findings revealed that 70% of the respondents indicated their SMMFs had clear governance structures, with regression analysis showing a positive correlation (r = 0.67) between strong governance and higher profitability. Additionally, 20% of respondents participated in financial literacy training, and 80% of them reported improved loan and savings management. Loan repayment rates were high, with 75% of respondents reporting rates above 80%, and a strong positive correlation (r = 0.72) was observed between financial literacy and repayment success. Challenges included capital shortages, with 40% of respondents reporting inadequate capital, alongside external issues such as poor economic conditions and weak regulatory enforcement. Despite this, 60% of respondents noted sufficient capital availability. The study concluded that governance structures, financial literacy, and capital availability are crucial to SMMFs' financial sustainability. It recommended enhancing governance practices through leader training, expanding financial literacy programs for all members, improving access to capital by partnering with local governments, and developing risk mitigation strategies to address economic challenges. These measures aim to strengthen the financial performance and long-term sustainability of SMMFs.

Nexus between AMCs and distributors and its impact on investor wealth

This study explores the relationship between AMCs and distributors in India, analyzing the effects of distributor commissions on mutual fund performance and AUM growth of equity funds. While commissions may temporarily boost AUM growth, they often lead to high-expense, underperforming funds, ultimately harming investors. Fund ratings, driven by performance, significantly influence AUM growth, but the negative impact of commissions on ratings can trigger a vicious cycle, hindering long-term growth.

The performance of asset allocation mutual funds

The performance of asset allocation mutual funds

Risk-Adjusted Returns of Private Equity Funds: A New Approach

Abstract This paper introduces a new metric, α, to benchmark the performance of individual private equity funds. Our metric is substantially less sensitive to noise in fund cash flows compared to the popular public market equivalent (PME) and its generalization (GPME), while having the same aggregate pricing implications as GPME. For a large data set of fund cash flows, α estimates have much lower standard deviation across funds than does (G)PME. For buyout funds, PME and α are close, but deviate in certain subsamples. Using α increases power in regressions involving fund performance and improves performance predictability of future funds. (JEL C58, G12, G23, G24)

Optimizing estate planning through strategic mutual fund investments: Analysis on evaluating mutual fund performance models for long term investment objectives

Optimizing estate planning through strategic mutual fund investments: Analysis on evaluating mutual fund performance models for long term investment objectives

Pension funds in Colombia and implications: A bibliometric analysis from Scopus

This study delves into the dynamic landscape of pension funds in Colombia, examining both its current research status and practical implications. Understanding the state of pension systems is crucial for individuals' financial security and a country's overall economic stability, especially given factors such as an aging population and evolving socio-economic dynamics. By comprehensively analyzing scholarly publications on Colombian pension funds using the Scopus database, this research sheds light on key trends and contributors shaping policy formulation and financial planning. The analysis covers a period from 1987 to 2023, identifying 71 relevant articles through keyword searches and filters. Various metrics, including publication trends, citations, international collaboration, and authorship dynamics, were quantitatively assessed. The results reveal an annual growth rate of 5.37%, with research articles comprising 81.69%, review articles 7.04%, and other formats like books, book chapters, and conference papers making up 11.27% of the total documents. Notably, countries such as the UK, the USA, Spain, and Colombia emerge as key contributors to the literature. Among authors, Mesa-Lago, L., stands out as a significant figure, with one of the earliest publications on the topic. The findings underscore the growing importance of pension funds in Colombia, particularly in the context of fund performance research amid financial crises. The prevalence of international collaboration suggests a global interest in understanding and contributing to the development of Colombian pension systems. Furthermore, the study identifies research gaps, particularly in areas concerning the socio-economic impact of pension policies, providing a roadmap for future investigations. Policymakers, financial practitioners, and researchers can leverage these insights to inform strategic decision-making and address critical challenges in optimizing pension fund management in Colombia.

A Study on Perception of Mutual Fund Investment

This study explores the performance, risks, and opportunities associated with mutual fund investments, particularly in the Indian market. It evaluates different mutual fund types, analyzing their historical returns and risk metrics to provide investors with data-driven insights. The research examines the factors influencing mutual fund performance, including market volatility, asset management strategies, and economic conditions. Additionally, the study assesses investor behaviour in response to mutual fund performance, emphasizing the role of financial literacy and risk tolerance. The findings suggest that mutual funds offer a viable investment option for wealth creation, with equity-based funds outperforming others over a long-term horizon. However, market risks remain significant, requiring careful management and strategic investment planning

CORPORATE GOVERNANCE, INVESTMENT STRATEGY, MACROECONOMIC VARIABLES AND FINANCIAL PERFORMANCE OF PENSION SCHEMES IN KENYA

<p>The study investigated the impact of corporate governance (CG), investment strategy (IS) and macroeconomic variables on the financial performance of pension schemes in Kenya, thereby addressing the key research question: What is the effect of CG, IS and macroeconomic variables on the financial performance of pension funds in Kenya? Qualitative, quantitative and correlational research designs were used to assess the effect of these factors on the financial performance of pension funds. Quantitative data on the annual return of pension funds and macroeconomic variables from 2012 to 2020, as well as qualitative data on CG indicators and IS, were used in the study. Return on investments proxied pension fund performance. Primary data was collected using survey questionnaires from the pension schemes from both the CG and IS indicators to develop both CG and IS indices. The findings show that CG, as well as IS and macroeconomic variables, impact pension funding differently. The effect of CG indicators on pension performance was positive and significant. The intervening effect of IS on the link between CG and pension performance was significant, while the moderating effect of macroeconomic variables was significant. The individual contribution of both CG indicators and macroeconomic factors on pension performance, nonetheless, varied. The main conclusion of the study is that pension fund financial performance is influenced by CG, IS and macroeconomic factors implying that there is a need to take into account the impact of these factors in the execution of investment plans of pension funds to ensure the generation of adequate funds for retirement benefits.</p><p> </p><p><strong>JEL: </strong>G23, G32, G34, E44, O55<strong></strong></p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0715/a.php" alt="Hit counter" /></p>

The redemption of The Accidental Republic: 70 years of Chinese Workers’ Compensation Insurance

Abstract The Accidental Republic is a concern for all industrialised countries, and China is no exception. To solve this problem, Workers’ Compensation Insurance (WCI) is a perfect option. The redemption of The Accidental Republic can be understood through the development of WCI. However, little attention has been paid to the development of Chinese WCI. Starting from labour insurance regulations promulgated in 1951, this research explores over 70 years of reform and development of Chinese WCI, explicitly dividing reforms into three phases – establishment and implementation, exploration and practice, and adaptation and formation – that aligned with stages of China’s economic development. Further, the insurance fund performance in the last decade is evaluated by Data envelopment analysis and Malmquist (DEA-Malmquist), through the static and dynamic results, yielding generally average results. Subsequently, five major problems of WCI are identified and discussed and five suggestions offered drawing on international comparison and the national situation. Lastly, the accidental and inevitable aspects of China’s WCI system during the redemption of The Accidental Republic are summarised.

The countdown to carbon neutrality: Implications for passive investors

In 2019 the European Union (EU) Climate Benchmarks Regulation established a set of standardized emission reduction criteria for financial benchmarks. This study examines the risk-adjusted performance of equity exchange-traded funds (ETFs) tracking EU Climate Transition Benchmarks (CTBs) and EU Paris-Aligned Benchmarks (PABs). Our findings reveal that, after the implementation of the regulation, equity CTB ETFs have exhibited no significant risk-adjusted performance difference compared to their non-sustainable twin ETFs. Conversely, equity PAB ETFs, which adhere to more stringent environmental standards, have underperformed their non-sustainable counterparts. Our results suggest that stringent emission reduction objectives have a negative effect on investors’ returns.

Investment Portfolio and Performance of Mutual Funds in Nigeria

Investment Portfolio and Performance of Mutual Funds in Nigeria

Persistence and Domiciled Mutual Fund Managers Performance: Evidence for South Africa

This paper presents an overview of the South African domiciled mutual fund industry and studies mutual fund performance using a survivorship bias-free sample of 2,843 share class of funds. 4-factor asset-pricing model is used to measure performance, and an additional two factors from the recent framework have been considered [1,2]. This study is able to provide further evidence on the performance of open-end mutual fund managers in a notable emerging market, South Africa. This paper investigates whether mutual fund managers’ inability in developed markets to beat the market, which has been widely proved, also holds in less developed markets. Furthermore, we examine if South African fund managers exhibit persistence in performance. The negative net alpha for South African domiciled mutual fund managers shows that they underperform their respective market benchmarks and are not able to add value. Lastly, consistent with results in developed markets, for all portfolios with different magnitudes, the paper reveals a persistence in performance; however, the effect is attributed to "icy-hands" rather than "hothands."

Understanding Mutual Funds Performance with mediation of Human Capital and GDP-Growth in Pakistan Mutual Funds: Demonstration of Structural Equation Model

This work sheds light on the complex interplay between mutual fund performance, using human capital, and GDP growth as mediating variables in Pakistan through the lens of Structural Equation Modeling. By employing this sophisticated analytical approach, the findings uncovered nuanced nexus that traditional methods might have overlooked. The findings underscore the critical role of GDP-Growth and human capital as a mediating factor, suggesting that investments in mutual funds could have far-reaching effects on the financial performance on individual investors. Moreover, the demonstrated link between GDP-growth and mutual fund outcomes highlights the intricate web of economic factors influencing investment landscapes. Our findings thus reveal that the impact of the market factor and GDP growth on portfolio returns shows statistically significant estimates both mediation models. However, size-factor shows two portfolios significant while two portfolios insignificant results using both mediating variables. However, the value factor shows highly significant in both mediating models but reveal insignificant nexus with HC-Growth as mediating variable using only FF3FM. Moreover, momentum factor shows insignificant results for both mediating models. As Pakistan continues to develop its mutual fund market, policymakers and fund managers alike would do well to consider these interconnections in their decision-making processes.

On the valuation skills of corporate bond mutual funds

Abstract The corporate bond market is larger, more illiquid, and presumably less efficient than the equity market. These features provide numerous profit opportunities for corporate bond mutual funds that are unique to the corporate bond market. However, whether corporate bond mutual funds have the valuation skills needed to take advantage of these opportunities is unclear. We introduce a novel measure to assess the valuation skills of investment-grade corporate bond mutual funds, which we refer to as the valuation accuracy score (VAS). VAS recognizes funds holding more underpriced and less overpriced corporate bonds as ex-ante having better valuation skills. It predicts future fund performance, is stable over time, and is unrelated to other sources of skill. Investors chase the performance of higher-VAS funds more aggressively and exhibit a convex flow–performance relation among these funds.

Do the Characteristics of Startup Founders Matter for Funding Performance?

Introduction/Main Objectives: Based on the upper echelons theory, this research examines the role of startup founders' characteristics on startup funding performance (SFP). This study considers the founder's experience, education, and gender as the characteristics that positively affect the SFP. Background Problems: While academia and industry emphasize the importance of startup funding performance (SFP), the empirical evidence on its determinant has received less attention. Yet, upper echelons theory addresses the importance of a leader's characteristics in increasing the organization's performance. Therefore, the current study focuses on investigating the role of startup founders' characteristics in the SFP. Novelty: The current study proposes the founder's characteristics as the key factor for startup funding. Unlike previous studies, this study utilized a survey design to answer the research question. Additionally, this study is the pioneer for entrepreneurial finance studies in gauging the upper-echelons framework. Research Methods: This research collected information from 228 Indonesian Startups through a survey. The estimation model is estimated using robust cross-sectional OLS regression and logistic regression. For robustness purposes, this study tackles the endogeneity issue by using two-stage least squares (TSLS) and PLS-SEM. Finding/Results: The regression results (including the two-stage least square approach) reveal that education and gender play a significant role in SFP but not experience. Moreover, it shows that higher education would increase a startup's probability of having better funding. Meanwhile, male entrepreneurs have lower funding performance than women entrepreneurs. Conclusion: Our study surmises that the education of the founders is crucial for startup financing in Indonesia. It also shows that the experience of founders has a trivial effect. It supports the upper echelons theory, emphasizing the pivotal role of founders' characteristics in entrepreneurial finance. Policy-wise, focusing on education can enhance startup success while addressing gender disparities is crucial. However, limitations exist, suggesting the need for longitudinal studies and broader sample sizes. Future research could explore managerial abilities and cultural factors, offering fresh insights into the literature.

Differences of Performance Measurement in Mutual Funds and Their Impact on Investment Decisions

This study discusses the performance of mutual funds in the capital market, divided into conventional and sharia mutual funds. The population of this research is all mutual funds, both conventional and sharia, which are traded on the Bibit application platform. Total of 77 conventional mutual funds and 31 sharia mutual funds. Based on sampling, 17 conventional mutual funds and 9 sharia mutual funds were obtained. The research observation period spans from 2021 to 2023. This research uses a quantitative approach with the Risk-Adjusted Return method, consisting of the Sharpe, Treynor, and Jensen methods. Then it will analyze the differences in performance between conventional and sharia mutual funds. The Mann-Whitney U Test is the analysis technique employed using SPSS 25. The results showed that there was no difference in performance between conventional mutual funds and sharia mutual funds based on the Shape, Treynor, and Jensen methods.