Throwing Good Money after Bad? The Impact of the Escalation of Commitment of Mutual Fund Managers on Fund Performance

CFA Digest ◽  
2014 ◽  
Vol 44 (5) ◽  
Author(s):  
Gregory G. Gocek
Keyword(s):  
Mutual Fund ◽  
Fund Performance ◽  
Escalation Of Commitment ◽  
Mutual Fund Managers ◽  
Fund Managers ◽  
The Impact

scholarly journals The impact of prior performance on the risk-taking of mutual fund managers

2008 ◽  
Vol 5 (1) ◽  
pp. 69-90 ◽  
Author(s):  
Manuel Ammann ◽  
Michael Verhofen
Keyword(s):  
Risk Taking ◽  
Mutual Fund ◽  
Mutual Fund Managers ◽  
Fund Managers ◽  
Prior Performance ◽  
The Impact

scholarly journals The Impact of Macroeconomic Variables on Mutual Funds Performance in Ghana

2021 ◽  
pp. 34-53
Author(s):  
Cai Li ◽  
Rosemond Atampokah ◽  
Helena Akolpoka ◽  
Priscilla Avonie ◽  
Baku R. Kwame
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Fund Performance ◽  
Foreign Portfolio Investment ◽  
Macroeconomic Variables ◽  
Macroeconomic Conditions ◽  
Fund Managers ◽  
The World ◽  
World Champion ◽  
The Impact

Development across the globe has been an agenda many citizens of the world champion irrespective of the area, sector or discipline within which it is being advocated. Politically, socially, and in the world of economics, mutual fund has gained significance within country’s economic environment. The phenomenal growth in the financial market of mutual funds can be attributed to the increase in the various financial schemes available, improvement in fund mobilization, as well as the growth of investments in the country. We examined the impact of macroeconomic variables on mutual fund performance of all mutual fund companies in Ghana over the period of 2008 to 2016. We performed correlation analysis, hence examined the co-movement of the returns from the selected funds with the key macroeconomic variables. We find macroeconomics variables positively affect the returns of funds. The effect comes by the amount of money available for investments. We further find exchange rate as the strongest macroeconomic variable affects the performance of mutual funds in Ghana. We established that Ghana receives a significant amount of foreign portfolio investment (FPI), where investors in other countries bring in their money to make investment on our financial markets. Our results provide evidence for fund managers on approach in dealing with macroeconomic conditions and its volatilities.

THE DISPOSITION EFFECT, ESCALATION OF COMMITMENT AND HERDING BEHAVIOR OF MUTUAL FUND MANAGERS

2015 ◽  
Vol 10 (01) ◽  
pp. 1550003
Author(s):  
YU-EN LIN ◽  
HSIANG-HSUAN CHIH ◽  
TAI-HSUN HUANG ◽  
CHIA-HSIEN TANG
Keyword(s):  
Mutual Fund ◽  
Negative Impact ◽  
Fund Performance ◽  
Escalation Of Commitment ◽  
Herding Behavior ◽  
Fund Managers ◽  
Negative Effect ◽  
Deposition Effect ◽  
Investment Portfolios ◽  
The Relationship

This paper investigates the relationship between deposition effect and escalation of commitment and herding behavior. First, this paper ranks the mutual fund into five groups by herding style, and we examine deposition spread (DISP) and escalation of commitment dispread (ESCA) zero investment portfolios in each herding style portfolio. Then, we investigate whether the paper gain ratio or paper loss ratio impacts on herding behavior after controlling other characteristics. Our results can be summarized as follow: First, deposition effect and escalation of commitment has negative impact on mutual fund performance. Second, in buy herding style fund, the deposition effect and escalation of commitment has the most negative impact on performance, however, in sell herding style fund, the negative effect disappears. Finally, we find the deposition effect indeed impacts the herding behavior.

scholarly journals THE EFFICIENCY EVALUATION OF MUTUAL FUND MANAGERS BASED ON DARA, CARA, IARA

2013 ◽  
Vol 14 (4) ◽  
pp. 677-695 ◽  
Author(s):  
Mohammad Reza Tavakoli Baghdadabad ◽  
Farid Habibi Tanha ◽  
Noreha Halid
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Data Envelopment ◽  
Unique Contribution ◽  
Management Styles ◽  
Mutual Fund Managers ◽  
Dea Model ◽  
Technical Management ◽  
Fund Managers ◽  
The Impact

We evaluate the efficiency of mutual fund managers of 20 different classes of management styles to identify the most efficient strategies and to propose an optimal pattern in selecting the funds by investors. We collect monthly data of 17,686 US mutual funds for a five-year period 2005–2010 to minimize the impact of survivorship bias and use Data Envelopment Analysis (DEA) model to evaluate the mutual fund performance. The set of considered inputs comprised “variance”, representing the mutual fund risk, and “turnover, expense ratio and loads indicators”, reflecting the mutual fund costs and fees. Two kinds of outputs are taken into account by our DEA model, “portfolio return” and “stochastic dominance indicators”. As a unique contribution, we state the benefits of the DEA approach in the DARA, CARA, and IARA framework, and evaluate the efficiency of mutual funds based on fund strategies as well as the performance of best mutual funds among their group. The evidence shows that the efficiency scores of technical, management, and scale are respectively 0.81, 0.921, and 0.874 for the DARA model, while the efficiency scores of two models of CARA and IARA are negligible. Also, we rank each management strategy in any model based on two methods – the number of referencing and the weighted value so that the managers of inefficient strategies must pattern the managers’ ability of reference (efficient) strategies to improve their efficiency on the fund market in future.

scholarly journals Asset Pricing Models and Stock Selection Ability of the Indian Mutual Fund Managers: An Empirical Study of Open-ended Growth Equity Schemes

2019 ◽  
Vol 3 (3) ◽  
pp. 49-62
Author(s):  
Kamal Gupta
Keyword(s):  
Asset Pricing ◽  
Mutual Fund ◽  
Equity Capital ◽  
Financial Resources ◽  
Stock Selection ◽  
Pricing Models ◽  
Mutual Fund Managers ◽  
Fund Managers ◽  
Asset Pricing Models ◽  
The Impact

The paper is devoted to the study of the analysis and forecasting of the possibility of joint investment Fund managers to choose securities for further investment. The methodological tools of the work are presented by models Jensen, Fama & amp; French and Carhart (which allow to assess the ability to select securities by managers of mutual funds). Empirical estimates of the analysis on three models showed that Indian mutual Fund managers have the ability to choose stocks. The author states that the analysis based on the Jensen model characterizes higher potential opportunities for the selection of securities by the managers of India’s joint-stock funds compared to the other two models used in the study. The results of the study can be useful for investors in making investment decisions, in particular in the process of placing their own financial resources in joint investment funds. The paper postulates that investors will be able to choose joint investment schemes in favor of funds, which provide the opportunity to choose securities for investment for more than ten years. The author notes that the key effect of the introduction of such a practice of interaction between investors and funds will be the growth of investor confidence, which will contribute to the accumulation of additional volumes of investments in the joint investment sector. This study is limited only to the schemes of investing their own financial resources, but in the future can be further expanded to the practice of using a wide range of schemes, since the possibility of choosing shares is associated with many financial processes and indicators. Since the study of asset pricing models is a continuous process, the author proposed to study the processes of joint investment in pension funds in the context of assessing the impact of financial indicators such as liquidity, return on investment, profitability. Keywords: investors, funds of collective investment, the ability to stock selection, patterns of growth equity capital.

scholarly journals Manager Tenure - Real Estate Mutual Fund (REMF) Versus Equity Mutual Fund Performance

2012 ◽  
Vol 11 (1) ◽  
pp. 17
Author(s):  
James L. Kuhle
Keyword(s):  
Real Estate ◽  
Mutual Funds ◽  
Mutual Fund ◽  
Fund Performance ◽  
Font Size ◽  
Mutual Fund Managers ◽  
Fund Managers ◽  
Equity Mutual Funds ◽  
Overall Performance ◽  
Real Estate Assets

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="font-size: 10pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">Historically, mixed evidence has been reported suggesting that mutual fund managers exhibit superior returns based on the length of their tenure.<span style="mso-spacerun: yes;"> </span>Further, the result of tenure performance for real estate mutual fund managers has been reported with mixed results.<span style="mso-spacerun: yes;"> </span>Therefore, it is the purpose of this research to consider the effect of management tenure on the overall performance of various classes of equity mutual funds, including those funds that invest exclusively in real estate assets. These results are studied over periods of three, five, and ten-year manager tenure to determine if there is significantly better performance among various tenure groups. </span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

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