Investment Vehicles Research Articles

Policy approaches to increase external investment by US pension funds in African countries

AbstractLimited external investment has dampened the prospect for a prosperous African continent that capitalises on economic integration and its demographic dividend. This article explores US pension funds as a candidate for increased investment by framing it through an institutional lens and the scholarly understanding of the risk–return dynamics in private capital allocation. The original research is centered on interviews of senior‐level professionals who work in the US pension fund investment ecosystem as well as experts at multilateral organisations. It identifies the primary investment impediments articulated in interviews and offers approaches policymakers in OECD member countries could undertake to increase the scale of US pension fund investment in African countries. These include: (1) Transform guarantee programs in size, scope, and risk tolerance; (2) Establish large pass‐through investment vehicles; (3) Focus resources to improve capital markets in African countries; and (4) Mandate development organisations to coordinate and proactively collaborate with firms in the US investment ecosystem.

Performance Evaluation and Risk Analysis of Mutual Funds: Insights from Recent Trends and Technological Advancements

Mutual funds, as a popular investment vehicle, pool resources from multiple investors to create diversified portfolios managed by professionals. This study explores the performance of mutual funds by analyzing various types, including equity, bond, and balanced funds, and their associated risks. Utilizing both primary and secondary data, the research evaluates mutual funds based on returns, investment patterns, and risk factors. It also examines the impact of recent technological advancements and regulatory changes on fund performance. The study highlights the benefits of mutual funds, such as diversification and professional management, while addressing potential risks including market, credit, and interest rate risks. By assessing the effectiveness of different mutual funds, the research aims to guide investors and improve capital allocation. The findings provide insights into how mutual funds contribute to individual financial goals and broader economic stability

Performance Analysis of Selected Mutual Fund Schemes: A Case Study

This study aims to evaluate the performance of selected mutual fund schemes offered by Aditya Birla Sun Life Mutual Fund. By leveraging secondary data from April 2022 to March 2023, this research analyzes the Net Asset Value (NAV) and corresponding returns of five mutual fund schemes. Utilizing statistical tools and the Sharpe Index Model, the study assesses risk-adjusted returns to rank the schemes and provide insights into their relative performance. The findings serve as a valuable resource for individual investors, organizations, and regulators, facilitating informed investment decisions and highlighting market trends. The research underscores the significance of mutual funds as a viable investment vehicle for diverse portfolios and examines the efficacy of specific schemes in achieving their investment objectives.

Mapping sustainable investing: Exploring ambiguities and consistencies among sustainable indices

Sustainable investing is perceived as a confusing black-box by many researchers, practitioners, and investors. Terminology, metrics, approaches, disclosure standards are quickly evolving, while the empirical evidence provides a growing number of mixed results. In this paper, we examine the composition, performance, and the risk-return profile of reference sustainable indices for the asset management industry, distinguishing between ethical and socially-responsible, faith-based, ESG and climate ones. Our findings reveal consistent investment trends across various sustainable indices, impacting their overall performance. Specifically, our analysis highlights a prevalent inclination towards large and growth-oriented companies, as well as a persistent focus on technology, financials, and commodity sectors. These results provide valuable insights for investors, asset managers, and index providers regarding the potential misalignment between an investment vehicle's labeling and its actual composition, and the implications this discrepancy might have on investors' expectations.

Equity Investment in Physician Practices: What's All This Brouhaha?

There have been two waves of equity-based investment in physician practices. Both used a combination of public and private sources but in different mixes. The first investment wave, in the 1990s, was led by public equity and physician practice management companies, with less involvement by private equity (PE). The second investment wave followed the Affordable Care Act and was led by PE firms. It has generated concerns of wasteful spending, less cost-effective care, and initiatives harmful to patient welfare. This article compares the two waves and asks if they are parallel in important ways. It describes the similarities in the players, driving forces, acquisition dynamics, spurs to consolidation, types of equity involved, models to organize physicians, and levels of market penetration achieved. The article then tackles three unresolved issues: Does PE investment differ from other investment vehicles in concerning ways? Does PE possess capabilities that other investment vehicles lack and confer competitive advantage? Does physician practice investment offer opportunities for supernormal profits? It then discusses ongoing trends that may disrupt PE and curtail its practice investment. It concludes that past may be prologue, that is, what happened during the 1990s may well repeat, suggesting the PE threat is overblown.

Bitcoin ETF: Opportunities and risk

The year 2024 witnessed a major development in the cryptocurrency industry with the long-awaited approval of spot Bitcoin exchange-traded funds (ETFs). This innovation provides investors with a new, regulated path to gain exposure to Bitcoin through a familiar investment vehicle (Kumar et al., 2024). However, unlike traditional ETFs that directly hold underlying assets, Bitcoin ETFs rely on a creation and redemption process managed by authorized participants (APs). This unique structure introduces distinct characteristics in terms of premium/discount behavior compared to traditional ETFs. This paper investigates the premium and discount patterns observed in Bitcoin ETFs during first four-month period (January 11th, 2024, to May 17th, 2024). Our analysis reveals that these patterns differ significantly from those observed in traditional index ETFs, potentially exposing investors to additional risk factors. By identifying and analyzing these risk factors associated with Bitcoin ETF premiums/discounts, this paper aims to achieve two key objectives: · Enhance market understanding: Equip and market and investors with a deeper comprehension of the unique liquidity risks inherent in Bitcoin ETFs. · Provide a clearer risk management frameworks: Offer a clearer perspective on the risk-return profile of digital asset ETFs, specifically focusing on Bitcoin ETFs. Through a thorough analysis of premium/discount behavior and the underlying factors contributing to it, this paper strives to contribute valuable insights for investors navigating the evolving landscape of digital asset investments

The football world upside down: Traditional equities as an alternative for the new fan tokens? A portfolio optimization study

This study provides a comprehensive analysis of the relationship between fan tokens and equities as investment vehicles in football clubs. Using the GO-GARCH methodology to account for time-varying higher-order co-moments, we examine the risk-return characteristics of these assets in different portfolio contexts over the period November 2021-March 2023. Our results show high diversification opportunities between fan tokens and equities, especially with investments in different leagues. Portfolio analysis shows that equities generally outperform fan tokens as an investment vehicle, highlighting the importance of active portfolio management. The study also shows that equities have broader diversification potential than fan tokens when added to a portfolio. Furthermore, Turkish fan tokens have better characteristics than Italian fan tokens, possibly due to the nonfinancial benefits for investors. The results are relevant for both retail and institutional investors, regardless of their risk tolerance profiles.

The Persistence of Equity Mutual Fund Performance: Further Evidence from an Emerging Economy

This study evaluates the persistence of performance of actively managed, equity-based mutual funds in Nigeria using monthly net asset values (NAVs) of 30 funds obtained from the Securities and Exchange Commission over 10 years from 2012 to 2021. We employed a non-parametric technique based on the Contingency Table to test for performance persistence, using the Cross-Product Ratio (CPR) and the Rank Correlation statistics. Evidence shows that mutual funds do not exhibit performance persistence, and the performance of loser funds does not repeat, hence past performance does not predict future performance. Therefore, we recommend that retail investors (and their advisers) should not rely on historical performance to select mutual funds as an investment vehicle. This study provides valuable insight into the performance of actively managed funds in Nigeria and contributes to the ongoing debate about the efficiency of the financial markets and the role of active fund management. It suggests that investors might be better off with passive investment management strategies, given the lack of persistence in the performance of actively managed funds.

Science or scientism? On the momentum illusion

AbstractThis study explores the risk of the traditional momentum strategy in terms of its realized variance using various data frequencies. It is shown that momentum risk is infinite regardless of the data frequency, implying that (a) t-statistics for this strategy do not exist, (b) correlation-based metrics such as Sharpe ratios do not exist either, and (c) the momentum premium is not observable in reality. It is further shown that the time-honored lognormal distribution is unable to accurately model extreme events observed at various variance data frequencies. Finally, it is shown that the well-known effect of time aggregation does not work for this investment vehicle. Hence, the study is forced to conclude that momentum stories have no valid foundation for their claims.

Performance Analysis and Prospects of ESG Exchange-Traded Funds in the Mainland Chinese Market

This article delves into In this article, we conduct a comprehensive analysis of Environmental, Social, and Governance (ESG) Exchange-Traded Funds (ETFs) in the dynamic landscape of the Mainland Chinese market. The research categorizes existing academic perspectives into three distinct groups, evaluating whether ESG ETFs outperform, perform similarly, or underperform conventional ETFs. Employing a meticulous methodology, encompassing annualized volatility, daily average returns, Sharpe ratio, Information ratio, and tracking error, we delve into the nuanced performance metrics of these investment vehicles. The findings reveal a nuanced picture: within an annualized volatility range of 0.6% to 0.8%, ESG ETFs exhibit competitive performance, particularly demonstrating resilience in risk mitigation when market returns are negative. However, our analysis underscores crucial challenges in the current ESG landscape in Mainland China. The lack of clear ESG definitions and standardized evaluation criteria hampers a comprehensive assessment. Additionally, there is a notable disparity in ESG ratings for listed companies, adding complexity to accurate evaluations. Looking ahead, the study emphasizes the imperative of defining ESG standards clearly and establishing uniform evaluation systems and information disclosure mechanisms. These steps are essential to enhance the accuracy and reliability of ESG ETF evaluations, thereby fostering a more robust and stable investment environment. This research provides valuable insights for investors, policymakers, and market participants, illuminating the path toward optimizing the potential of ESG ETFs in the Mainland Chinese market.

Old age care fund helps to manage their funds In easy way

Abstract: A Old Age Care Funds is a sort of investment vehicle in which the combined capital of several participants is used to purchase a diverse range of bonds, equities, and other securities. Funds, which are professionally managed, give people the chance to invest in a variety of assets without having to handle them themselves. The value of the Fund shares that investors purchase varies according to how well the underlying assets perform. Funds are well-liked by both rookie and seasoned investors because they offer diversity, liquidity, and expert management. Diverse mutual fund categories, such as stock, bond, money market, and hybrid funds, are available to suit varying investment goals and risk tolerances. Investors can select funds according to their risk tolerance, time horizon, and financial objectives. Securities regulators supervise mutual funds to maintain transparency and safeguard the interests of investors. They are now an essential instrument for people to develop a diversified investment portfolio and engage in the financial markets. Old Age Care Fund portfolio analysis is an important component of investment management that includes a variety of approaches for evaluating the performance, risk, and composition of investment portfolios. The efficient market hypothesis (EMH) states that markets are efficient and reflect all available information, making it difficult for fund managers to regularly outperform the market, according to Malkiel and Fame (1970). Jensen (1968) proposed the Capital Asset Pricing Model (CAPM), which emphasizes risk-adjusted returns and the identification of alpha, which indicates a fund manager’s capacity to create excess returns above the market. IndexTerms – Python, Powet-BI, Data Analysis.

Complements or substitutes? The effect of ETFs on other managed funds

We examine the complementary and substitute effects of exchange-traded funds (ETFs) and two other investment vehicles: mutual funds (MFs) and closed-end funds (CEFs). Focusing on the capital flow into investment vehicles, we find a complementary effect between ETFs and MFs, and substitution effect between ETFs and CEFs. The complementarity and substitution effect remains robust when focusing on subsamples with different market conditions and fund management styles. We present further evidence that past inflows of the same investment vehicle are significantly correlated with current inflows. These findings have implications to both investors and regulators in understanding the interdependence of investment vehicles.

MUTUAL FUND PORTFOLIO ANALYSIS

Abstract — Mutual funds serve as popular investment vehicles due to their potential for diversification and professional management. However, choosing the right funds and optimizing one’s portfolio allocation can be complex. This project presents a comprehensive Mutual Fund Portfolio Analysis system designed to assist investors in making informed decisions. The system allows users to input their mutual fund holdings, tracking them over time to assess performance. It offers a range of analytical tools, including portfolio diversification analysis, risk assessment, and comparison against relevant benchmark indices. These features provide investors with a holistic view of their portfolio’s performance and risk profile. Moreover, the system employs advanced algorithms to generate personalized recommendations for optimizing the portfolio based on the user’s investment goals and risk tolerance. These recommendations aim to enhance returns while managing risk effectively. By utilizing this system, investors can gain deeper insights into their mutual fund investments, enabling them to make well-informed decisions. Ultimately, this project aims to empower investors to achieve their financial goals through strategic mutual fund portfolio management. Keywords – Mutual funds, Portfolio analysis, Investment decisions, Diversification, Risk assessment, Benchmark comparison, Portfolio optimization, Investment goals, Risk tolerance.

Ranking Investment Preferences in India's Dynamic Market: From SIPs to ETFs

This study examines the Indian stock market using the Weighted Point Method (WPM) to evaluate various investment options. The research focuses on five key investment vehicles: Exchange-Traded Funds (ETFs), Government Savings Schemes, Bonds and Debentures, Systematic Investment Plans (SIPs), and Fixed Deposits (FDs). These options were assessed across four critical indicators: Economic Indicators, Corporate Earnings, Market Sentiment, and Sectoral Analysis. The WPM analysis revealed that Systematic Investment Plans (SIPs) emerged as the most preferred investment option, achieving the highest preference score of 0.91795. SIPs demonstrated consistently strong performance across all evaluated criteria, suggesting they offer a balanced approach to investing with potential for steady growth and effective risk management. Bonds and Debentures ranked second with a preference score of 0.72492, showing particular strength in Market Sentiment. Fixed Deposits (FDs) secured the third position with a score of 0.64406, highlighting their continued relevance in the Indian investment landscape, especially for risk-averse investors. Government Savings Schemes and ETFs ranked fourth and fifth respectively, each showing strengths in specific areas. The study underscores the complex and dynamic nature of the Indian stock market, emphasizing the importance of considering multiple factors in investment decision-making. It highlights the value of quantitative methods like WPM in providing a structured approach to comparing diverse investment options. The findings suggest that while SIPs appear to be the most attractive option overall, the Indian market offers a range of investment vehicles catering to different risk appetites and financial goals. The research concludes that investors should consider their personal objectives, risk tolerance, and investment horizon when making decisions, and regularly review their strategies in light of evolving market conditions and economic indicators.

The Evolution and Review of Regulatory Changes on Emerging Asian Mutual Fund Industry Post-Global Financial Crisis

The proposed research paper aims to explore the significant transformations in the mutual fund industry following the global financial crisis of 2007-2009, with a particular focus on regulatory changes and their effects on mutual fund performance and investor confidence. The study will examine how new liquidity related regulations, such as enhanced liquidity-related disclosures, have contributed to the industry's resilience and growth. Additionally, the paper will analyze the disparity in mutual fund objectives and compositions across different regions, specifically comparing the dominant markets of the United States, and Emerging Asian, markets. By investigating the evolution of open-ended and exchange-traded funds as the fastest-growing investment vehicles post-crisis, this research aims to provide a comprehensive understanding of the current state and future prospects of the global mutual fund industry.

Financing the future: Asymmetric association between green investment and electric vehicles

Green investment in electric vehicles represents a pivotal shift towards a sustainable future, promising to revolutionize our transportation systems while significantly reducing greenhouse gas emissions. This research aims to probe the linkage between green investment and electric vehicles across the top 10 economies with the highest electric vehicle adoption rates (China, USA, Norway, Germany, UK, France, Portugal, Netherlands, Belgium, and South Korea). Unlike earlier studies that primarily utilized panel data methods and overlooked the individual nuances of each country, our investigation employs the advanced ‘Quantile-on-Quantile’ technique. This novel approach enables us to delve into the relationships between variables within each specific country, thereby improving the precision of our analysis. As a result, this study provides a comprehensive global viewpoint, revealing nuanced findings about each nation's distinct characteristics. The study's findings express a positive connection between green investment and the electric vehicle stock in various segments of the sample economies. Furthermore, this research highlights diverse trends in these connections within different nations. The results emphasize policymakers’ need to conduct comprehensive evaluations and develop effective strategies to address changes in both green investment and electric vehicles.

Review Paper: “Study the Awareness About Mutual Fund

Mutual funds have emerged as popular investment vehicles globally, offering individuals the opportunity to invest in a diversified portfolio managed by professionals. This study aims to investigate the awareness levels regarding mutual funds among individuals. The research employs a mixed-methods approach, utilizing both quantitative surveys and qualitative interviews to gather comprehensive insights. The quantitative aspect involves administering structured questionnaires to a diverse sample of participants, assessing their familiarity with mutual funds, understanding of their functioning, and reasons for investing or not investing in them. Additionally, demographic factors such as age, income, and education will be analyzed to discern any correlations with awareness levels. Complementing the quantitative data, qualitative interviews will be conducted with select participants to delve deeper into their perceptions, attitudes, and experiences related to mutual funds. This qualitative component aims to provide nuanced insights into the factors influencing awareness and investment decisions.

Effect of Diversification on Uptake of Pension in Uasin Gishu County, Kenya

Pension schemes have gained popularity globally, leading to exponential growth and establishment in developed countries. Nevertheless, the uptake of pension products is marked by a lack of appropriate investment vehicles, limited market liquidity knowledge, and poor expertise about these investments and their associated risks. Therefore, the purpose of the study was to investigate the effect of diversification on the uptake of Pensions in Uasin Gishu County. This was because there was a relatively low uptake of pensions in the region. The study employed an ex-post-facto research design. The target population of the study was 159 employees working in the Pension Institutions in Uasin Gishu County, Kenya. A simple random sampling technique was employed to select a sample of 114 employees from all the pension institutions in Uasin Gishu County. A questionnaire was adopted as the data collection instrument. Data collected were analyzed by using descriptive and inferential statistics. Multiple Regression Analysis was employed to test the hypotheses. The study established a positive relationship between diversification (p=0.000) with a contribution of 63.5% and uptake of pension products. The study commended that the Pension Institutions in Uasin Gishu County should devise products that fit the informal sector as a way of promoting the uptake of Pension Institutions in Uasin Gishu County. The study also commented that the pension institution should diversify their products to include more affordable products such as daily submission of savings via mobile phones.

Deciphering crypto interconnections using a multi-analytical approach

Blockchain technology has primarily underpinned cryptocurrencies that are used either as speculative investment vehicles or for transaction facilitation. There has been a keen interest in understanding the dynamics of interconnectedness and conditional correlations among cryptocurrency prices. While most studies have primarily focused on Bitcoin or the top few cryptocurrencies, this study adopts a comprehensive, multi-analytical approach, incorporating other smaller cryptos that appeal to small and medium investors. Pearson correlational analysis explores the interconnectedness among cryptos and investigates co-movement in crypto prices through their returns, volatility, volume traded, and the CCi30 index returns. Principal Component Analysis (PCA) is used to identify highly correlated clusters, summarizing cross-sectional information based on covariance within the predictors. The predictive regression model of Granger Causality test is applied as a vector autoregression (VAR) forecasting method to examine Granger causality of price movements within the clusters identified. The findings from the correlational matrices of returns and volatilities show no difference in behaviours between larger and smaller cap ones, whereas correlations in trading volumes indicate high correlations in large market-caps. Smaller market-cap cryptos exhibit stronger correlations in volatilities than the larger market cap ones. Two highly correlated clusters emerged from the PCA analysis, with Binance Coin (BNB) and Ripple (XRP) exhibiting greater influence than Bitcoin (BTC) and Tether (USDT) in the second cluster. The findings will enable cryptocurrency users and investors to grasp price mechanisms better, offering valuable insights to improve their decision-making abilities.

Analyzing the Relationship between Real Estate Investments and Portfolio Diversification

Real estate has long been considered an attractive investment option for individuals and institutions seeking to build wealth and diversify their portfolios. Unlike traditional investment vehicles such as stocks and bonds, real estate offers unique characteristics that can potentially enhance returns and mitigate risk. This analysis aims to explore the role of real estate investments in portfolio diversification and assess their potential impact on overall portfolio performance. Portfolio diversification is a fundamental principle in investment management, as it helps to spread risk across different asset classes and mitigate the impact of market fluctuations on a portfolio's overall value. By including assets with low or negative correlations, investors can reduce the volatility of their portfolios and potentially achieve higher risk-adjusted returns. Real estate investments, including direct property ownership, real estate investment trusts (REITs), and other real estate-related securities, have traditionally exhibited low correlations with other asset classes, such as equities and bonds. This low correlation can be attributed to the unique characteristics of real estate, including its tangible nature, the presence of rental income streams, and the potential for capital appreciation. Furthermore, real estate investments can provide a hedge against inflation, as property values and rental rates tend to increase during periods of rising prices. This feature makes real estate an attractive diversification option, particularly for investors seeking to protect their portfolios from the eroding effects of inflation. This analysis will delve into the historical performance of real estate investments, examine their risk and return characteristics, and evaluate their potential contribution to portfolio diversification. By examining empirical data and leveraging portfolio optimization techniques, we aim to provide insights into the optimal allocation of real estate investments within a diversified portfolio.