Effects of fund and manager attributes on equity fund performance in Türkiye

Abstract

The relative performance of an equity fund having a benchmark consisting of one or more indices can be simply calculated by comparing the fund’s return with its benchmark’s return in given periods. The purpose of this study is to analyze the specific characteristics of funds and investment management firms that may affect a fund’s relative performance to provide investors with a supplementary decision tool for selecting better performing funds and investment management firms. In our analysis, excess gross return before management fee, which is the relative performance of a fund, is used as the performance measure. Previous period performance, fund size, total expense ratio, fund age, manager’s (firm) total assets under management, manager’s human resources cost per total assets under management, and equity ratio of benchmark on excess gross return are used as factors affecting fund performance of 27 equity funds in Türkiye for 20 quarters ending 2022 Q4 using panel data analysis. Results show that as fund size increases, better performance can be expected; while manager’s total assets under management and manager’s human resources cost per total assets under management are found to have inverse effects on performance.

Keywords

• Fund performance
• Equity funds
• Excess gross return
• Türkiye mutual funds

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