Mutual Fund Market Research Articles

Fuzzy MCDM techniques for portfolio selection in the post-COVID Indian mutual fund market: a comparative study of FAHP and entropy methods

Fuzzy MCDM techniques for portfolio selection in the post-COVID Indian mutual fund market: a comparative study of FAHP and entropy methods

What Information Do Investors Care About? Evidence in the Korean Mutual Fund Market

What Information Do Investors Care About? Evidence in the Korean Mutual Fund Market

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.

Devil in FIPA: the motivations and consequences of frequent inter-industry portfolio adjustments in the Chinese mutual fund market

ABSTRACT Based on the equity asset allocation of Chinese open-end active funds, we examined the potential motivations and economic consequences of frequent inter-industry portfolio adjustments (FIPA) by funds. The research findings indicate that the fund tournament effect compels managers to engage in FIPA. Funds with higher managerial ownership exhibit lower levels of FIPA, suggesting that managers themselves do not favour FIPA. Instead, evidence suggests that fund managers cater to investors’ preferences for FIPA, but there exists an asymmetric effect between top-performing and underperforming funds. Specifically, top-performing funds attract more capital inflows after engaging in FIPA, while underperforming funds tend to engage in more aggressive FIPA, leading to net outflows of funds. Furthermore, the results exclude the motive of funds engaging in FIPA for risk hedging purposes. Finally, we explored the impact of FIPA on the stock market, revealing that fund FIPA delays the incorporation of negative company-specific information into stock prices, ultimately reducing stock price information efficiency.

Determinants of Investment Decisions of Mutual Fund in Nepal

Mutual funds in Nepal are financial vehicles that pool money from multiple investors to invest in diversified portfolios of securities, managed by professional fund managers. They play a crucial role in mobilizing savings and providing access to diversified investment opportunities for Nepalese investors. This study examines the factors influencing investment decisions in mutual funds in Nepal, focusing particularly on financial literacy, risk perception, investment behavior, and peer group influence. To achieve the stated objective, data were collected from the primary source using a structured questionnaire administered through convenience sampling technique. The respondents comprised 204 individual investors of mutual funds inside the Kathmandu Valley. The Smart PLS 4.0 was used to analyze the structural relationships within the proposed theoretical model. The findings of this study validated the set hypotheses that financial literacy, risk perception and investment behaviour have positive and significant effect on investment decisions among the investors in Nepalese mutual funds but the peer group has no any effect on investment decision. These results underscore the importance of targeted financial education programs and tailored investment strategies that enhance individual investor knowledge and understanding, thereby fostering more informed and independent investment decisions in Nepal's mutual fund market. The results may encourage to promote financial literacy through educational programs and integrating it into national curricula can empower investors to make informed decisions in Nepalese context.

An insight into return performance of ESG thematic equity funds in the Indian mutual fund market: A comparative analysis

An insight into return performance of ESG thematic equity funds in the Indian mutual fund market: A comparative analysis

Gambling preferences and fund company ownership: Evidence from China

This paper empirically tests the preference of China's public mutual funds for lottery-type equities, analyzing data from equity funds in the country's public mutual fund market from 2005 to 2022. The study finds that this gambling preference positively correlates with short-term fund performance, but negatively impacts long-term outcomes. Further investigation shows that the funds' propensity for gambling increases stock market volatility. However, fund company ownership can mitigate this risk amplification by implementing a risk-sharing structure. Additionally, a significant positive correlation exists between the mutual fund industry's gambling inclination and fund managers' optimism about future market movements. Finally, this article employs text analysis to explore the influence of gambling preferences from a non-quantitative information perspective, which helps control the investing behavior of institutional investors and enhances the real economy's access to the capital market.

Tracking Error Determinants in Mutual Funds: The Case of Regional Stock Exchange in West Africa

The BRVM (Regional Stock Exchange in West Africa) mutual fund (MF) market has grown rapidly in recent years. The performances obtained have allowed specific financial market shares to be included in the MSCI Frontier Market Index. This promotion facilitated the visibility of the BRVM to international investors. This study is part of this dynamic and evaluates the tracking errors of MF and their determinants. Results show that entry and exit fees, management fees, strategies, valuation frequencies, and size are determinants of the tracking errors of BRVM MFs.

PREFERENCE OF INNOVATIVE AND TECHNOLOGICAL INTEGRATION OF MUTUAL FUND INVESTMENT TO THE INVESTOR IN THE CHENNAI CITY

In today's investment landscape, the infusion of innovation and technology within mutual fund offerings has become increasingly indispensable, especially for investors in Chennai. This study aims to explore the preferences of Chennai-based investors towards innovative and technologically advanced mutual fund investment solutions. Through a comprehensive survey methodology, the research seeks to discern investor sentiments and expectations concerning the integration of technology in mutual fund platforms. Specifically, it investigates the extent to which investors prioritize user-friendly interfaces, personalized investment choices, and real-time tracking functionalities. By pinpointing these preferences, financial institutions and fund managers can tailor their offerings to meet the distinct requirements of Chennai investors, thus fostering heightened engagement and participation in the mutual fund market. This investigation underscores the imperative of embracing innovation to enrich the investor journey and propel mutual fund adoption in Chennai, addressing the evolving needs and expectations of investors in the digital era.

Exploring the Co-movement Between Return and Risk of Mutual Funds

The goal of this study is to review the significance of the mutual fund market’s return and volatility and which type of mutual fund has a vital impact which contributes to the understanding of the investor's indicates their investment decisions and identify the past related studies upon the performance of the mutual fund towards aligning to the latest short and long-term strategies for the responsible authority to reorient their policies to ensure the terms of exposure of current managerial actions is heading upon the evolution of innovation. The author has analysed and evaluated a broad range of literature on mutual funds, examining a range of factors and features that contribute to their short and long-term viability and diversification. As a result of their thorough review, the study has identified diverse types of mutual funds indicating that it plays a vital role in the survival and success of these investment vehicles. Furthermore, the current studies delving into a wide range of recognition of the Unit Trust Funds roles for the responsible institutions at domestic and international organisations directed towards establishing a better ailing with better-shaped strategies which are been explored. Yet, the past research has been a gap being explicated due to lack of innovation and this study would like to address the gap and is proposed along with the list of resources for future research with a similar aim. The originality of this study is to ensure that the validity of the research has been well assured by reference to highly indexed articles from various platforms such as Scopus, Web of Science etc. Thus, the purpose of the study is supported with solid justification.

PERFORMANCE ANALYSIS OF MUTUAL FUND: A COMPARATIVE STUDY OF THE SELECTED HYBRID (AGGRESSIVE HYBRID FUNDS & CONSERVATIVE HYBRID FUNDS) MUTUAL FUND SCHEME IN INDIA

This above study focused on a comparative analysis of selected aggressive hybrid and conservative hybrid mutual fund schemes in Indian mutual fund market, covering the period from January 2020 to December 2023. The study aims to evaluate the performance of these mutual fund schemes and compare their risk and return components. Data for the analysis was collected from secondary sources, including historical Net Asset Values (NAV) and Factsheets provided by Asset Management Companies (AMCs). Various statistical tools such as Rate of Return (RoR), Alpha, Beta, Standard Deviation, Sharpe ratio, Jensen's Ratio, and Treynor's Ratio were utilized to assess the performance and risk-adjusted returns of the selected mutual fund schemes. The findings indicate that the ICICI Prudential Equity & Debt Fund outperformed among aggressive hybrid funds, showed the highest annual returns and superior risk-adjusted performance. On the other hand, for conservative hybrid funds, the Kotak Debt Hybrid Fund - Direct Plan exhibited the highest annual returns, while the ICICI Prudential Regular Savings Fund - Direct Plan demonstrated strong returns and risk-adjusted performance. The above study highlights the importance of considering risk tolerance and investment objectives before making investment decision and selecting mutual fund schemes. Investors should carefully understand the both historical performance and risk metrics to make well informed investment decisions in consideration with their financial objectives and risk preferences.

The impact of salient fees: Evidence from the mutual fund market

In 2004 the SEC began requiring mutual funds to include the dollar amount of fund fees in shareholders reports. Before that, funds reported returns net of fees and didn't disclose fees separately. This natural experiment allows me to study the impact of separate reporting of fees on the level of fund fees. I find that average reported retail fund fees decreased by 27 basis points during the five-year period after the change in this rule, compared to the five-year period before the change. This reduction in fees was much higher for funds with higher fees and more volatile returns. I also find that fund investment became more sensitive to fund fees after 2004. These findings support the narrative that reporting of mutual fund fees separately in dollars made fund fees more salient and helped increase fee awareness among the investors, which, in turn, forced mutual funds to decrease fees.

Analyzing the performance of mutual funds in 2021–2022

Subject. The article investigates the effectiveness of mutual funds in 2021–2022. Objectives. The study of the mutual fund market to determine changes in the securities market due to the new political situation in 2021–2022. Methods. The study employs methods of descriptive statistics and comparative analysis. I carried out a thorough literature review. The independent data source for a private investor in Russia, i.e. Invesfunds, served as an information base of the study. Results. The descriptive analysis helped reveal that due to the high degree of uncertainty, increased market and infrastructure risks, there was not only an outflow of funds, but also the closure of a huge number of exchange-traded funds. At the same time, the structure of the inflow changed significantly – it was fully secured by the issuance of shares of closed-end investment funds. In 2022, open-ended mutual funds showed practically no excess profitability, compared to 2021. The key observation of the mutual fund market in 2022 was the influx of investors. Conclusions. The conducted research enables private investors to assess the current situation on the securities market, and, as a result, make a decision on the profitability of investing money. Legal entities, building an investment portfolio, should take into account the difficulties in dealing with foreign assets and, possibly, reconsider the direction of investment towards domestic assets.

Constraints for Investors towards Nepalese Mutual Fund

This study aims to evaluate mutual fund investment behavior in the context of the Nepalese mutual fund market. While there have been countless articles exploring the effects of different factors on mutual fund investment behavior of investors, no research has been found in the context of Nepal. The study intends to analyze the relationship of mutual fund awareness level, return perception, country governance, advertisement’s relevance, fund manager’s qualities, and ease of investment towards mutual fund investment behavior. The study found that among the six factors, four factors, namely awareness level, return perception, fund manager’s qualities, and ease of investment, significantly affect mutual fund investment behavior. The relationship has been measured using different statistical tools like regression and correlation. However, country governance factors and advertisement’s relevance show no relationship with mutual fund investment behavior. This study is significant because it fills the gap in the literature on mutual fund investment behavior in Nepal. The findings of this study can help investors, fund managers, and policymakers to make informed decisions regarding mutual fund investment.

Drifting from the Sustainable Development Goal: Style Drift in ESG Funds

In this paper, we investigate the impact of fund style drift away from sustainability on future fund flows and performance within the Chinese market. Utilizing data from four mainstream ESG rating systems, we develop a novel measure of ESG fund style drift, which enables us to quantify the deviation of a fund’s actual style from its declared sustainable objectives. Our analysis, based on panel and logistic regression techniques, reveals a significant positive relationship between ESG-drift and ESG fund’s flow-performance sensitivity, with a dominant effect on fund flow from individual investors. Interestingly, compared with ESG funds that stick with their sustainability-oriented objectives, funds experiencing ESG-drift exhibit poorer returns, underperformance, smaller fund size, lower subscription rates, lower industry concentration, and lower fund flows, highlighting the crucial role of funds following objectives that prioritize sustainability. However, the ESG-drift does not significantly influence the fund’s future performance. This paper provides pivotal insights into the complex dynamics between a fund’s ESG commitment and its actual style, with important implications for enhancing ESG policies within the regulatory framework of the Chinese mutual fund market.

Mutual Fund Schemes in India and its Types (Large Cap, Mid Cap, Small Cap)

One of the newest investment instruments on the financial market is mutual fund investing. Concerns about fair returns from various mutual fund schemes are very prevalent among investors. The current study examines the absolute returns of diversified equity funds' large-cap and mid-cap funds over various time periods. 59 large-cap funds and 40 mid-cap funds from various financial institutions have been compiled for various time periods, including 1 day, 1 week, 2 weeks, 1 month, 3 months, and 6 months. Institutions that manage mutual funds are vital to a nation's economic growth. In many industrialised countries, a thriving mutual fund market is the primary driver of economic expansion. India opens its market to various investments in order to offer a wide range of financial products. The performance analysis of mutual funds undertaken by Sharekhan Ltd. is the foundation of this study. In order to invest in bonds, equities, or other sorts of investments, mutual funds use the money from investors. They aid in lowering the investors' transaction costs.Investors don't need to pay attention to the previous performance of mutual funds because it doesn't predict how well they will perform in the future.

PERFORMANCE OF MUTUAL FUNDS ON SUSTAINABLE MICRO-HEALTH INSURANCE SCHEMES IN GHANA: The Role of Fast Adaptive Neural Network Classifier

Micro-health insurance models have emerged (in different forms) as a more reliable source of seeking financial protection for a significant proportion of Ghanaians against the downside of medical cost. Most micro-health insurance contributions end up with mutual funds hence the performance of the mutual fund determines to a large extent the sustainability of the scheme. This makes the mutual fund market an indispensable factor in stimulating or stifling healthcare access in Ghana with health equity implications. Recently, machine learning performance evaluation approaches such as Artificial Neural Networks (ANN) have proven valuable in evaluating the performance of mutual funds due to superior forecasting and calculating abilities relative to native algorithms. We applied a novel Fast Adaptive Neural Network Classifier (FANNC) to publicly available historical financial performance data from the Ghana Stock Exchange. We benchmarked our results against the outcome of a backpropagation neural network model (BPN) and measured speed of processing performance information for micro-health insurance managers looking for high earning but less risky investment destination for their vulnerable funds. The FANNC tool proved superior in terms of prediction error and processing time to existing robust models such as the Backpropagation neural network. Employing effective tools such as FANNC tools can quicken the pace of investment performance assessment, rank a hierarchy of desirable investment options for micro-health insurance schemes to explore. This can guarantee fast processing time and accurate investment decision of micro-health insurance to enable it play the essential role of enhancing health risk management of the members of the general public especially the poor and vulnerable that are often the victims of catastrophic healthcare expenditure.

Investor response to Morningstar's ratings, category information, and alpha in the Japanese mutual fund market

Mutual fund investors evaluate fund managers' skills before making investment decisions. Previous studies worldwide examined the rationale behind retail investors' investment decisions and found that investors reward performance by net fund flow. A Japanese study found that investors respond to alpha but do not risk factor-related returns. Surprisingly, the result would mean that Japanese investors are more sophisticated than US investors because the literature reported that US investors respond to factor-related returns without distinguishing them from alpha. We explore the background of this result in the Japanese market. This study focuses on the effects of Morningstar's fund ratings, its categories, and salient gross returns, which are readily available to investors unlike alpha. We find the following results: (1) Morningstar's rating does not substitute alpha, indicating that our result differs from the US results. (2) Investors respond only to high category excess returns, but it is a unique effect different from alpha. (3) Salient gross returns do not have a concrete relation with alpha. Moreover, we find solid convex relationships between alpha and fund flows. Investors' responses are limited to a few extreme flows; other than these, they do not respond to alpha. This extreme flow can explain the reactions to alpha on average reported in previous studies. In addition, we find that the category excess return has similar features. The solid convexity reveals that the Japanese mutual fund market is far from sophisticated, consistent with the literature. These results reveal the importance of fund distributors' behavior and information disclosure regulations.

Reaching-for-Income Behavior in the Japanese Mutual Fund Market

Reaching-for-Income Behavior in the Japanese Mutual Fund Market

A new measure of fund window dressing and its application to Chinese mutual fund market

In this paper, we propose a new window dressing index, Simulation Return Rank Gap, and show it improves over the two popular fund window dressing indexes, Backward Holding Return Gap and Rank Gap. First, we conduct a simulation analysis to confirm the dominance of the new index. Next, we use the Chinese market data to compare the three indexes empirically. We find all three indexes confirm the existence of window dressing in the Chinese fund market. The new index maintains a high consistency ratio and a large Spearman correlation coefficient with other indexes. It also has a smaller probability of misidentifying the window dressing funds. The results support the new index as a superior alternative to the current method.