The relationship between the fund manager 's personal characteristics and returns Ⅰ Introduction The improvement of Fund industry in China has a short period. Fund managers are the heart and soul in the decision making of funds who have the major places, they and their behind team own the advantages of collecting collating and analyzing information. But there still have no standard method can help general public choose the fund. Choosing a fund manager is much easier than choosing a fund in the huge fund pool for average investors. This paper utilise empirical method to discuss the relationship between the personal characteristics of fund managers and their performance, hope we can find the reasonable basis to explain selecting funds is …show more content…
Chevalier and Ellison (1999), furthermore provides new access for the study of fund earnings, they tend to concern about fund managers, assume it is necessary to distinguish the returns of persistence and expression comes from the manipulation of managers or fund itself. Only when the fund manager is the main indicator of the yield of the fund, then funds can be selected from the perspective of managers, and help investors to identify the manager’s characteristic to select fund. Furthermore, they introduced SAT average score to evaluate whether the fund manager’s university is prestigious. Through least squares analysis, they noticed that the higher SAT score and younger manager have better achievement, and the fund administrator with MBA degrees have a greater chance of investing in better-growing stocks, compare with who without MBA, yet this variable has an insignificant effect on fund revenue. Indro et al. (1999) became a pioneer in the field on dividing the type of fund managers, separate analysis open-end fund managers. They argue that if the fund’s profit is lower than the average at the same time, it will face great difficulties in attracting new investors and keeping mature investors. Niessen-Ruenzi and Ruenzi (2006) found that male fund managers tend to risky investment style, conversely
A mutual fund manager is a person who actively buys or sells and sometimes both funds. They are experienced in implementing a funds strategy used for investing and manages its trading activities as well as the portfolio. Choosing whether or not to invest in Ford Motor Company will take the use of a SWOT analysis and learning about the stakeholders of the company.
My experience at Villanova, both as a research fellow and a student was formative of my fascination with investments, hedge funds, and mutual funds. My original interest sparked while working with Dr. Velthuis and performing literature reviews on effects of corporate activism on stock prices, and size effects on hedge fund returns. Since then, classes in Portfolio Theory and
Unlike mutual funds who only charge a management fee, much of the hedge funds compensation structure is linked to the fund performance. To avoid cases of managers charging the investor performance fees twice for the same returns, there is a prescription that managers should not charge any fee for a fund that has lost ground (Boyson, 2010). However, when the performance surpasses the previous performance level known as a ?high water mark?, the manager can charge the performance fees once again. Furthermore, many funds may also carry out a hurdle rate that managers must achieve before they charge any incentive fees (lecture notes).
1. Fund manager are expertise in the technology industry and thus the fund deals with technology driven companies which fund managers are comfortable in prediction of individual stock related risk and return and they are able to evaluate the technology field and pick up outperforming and positive alpha stocks in the technology field accurately.
Conventional academic theories suggest that in markets characterized by high competition, easy entry, and information efficiency, it would be extremely difficult to beat the market on a sustained basis. William H. (Bill) Miller III, a mutual fund manager of Baltimore, Maryland – based Legg Mason, seemed to defy such theories while managing Legg Mason’s $11.2 billion Value Trust. Miller and Value Trust outperformed the S&P 500 for 14 consecutive years, the longest success streak for any portfolio manager in the mutual-fund industry. Proponents of academic theory have explained this extraordinary success as luck, meanwhile others attribute the
As asset allocation has reached the efficient frontier, the role of having superior fund manager is becoming more critical. Manager’s selection is a factor that differentiates Yale from other endowments.
Financial managers have a job to provide clients with stock investments and portfolios that are diverse and successful. In order to provide this service they must be aware of the following:
By analyzing the performance of the various mutual funds, it would help the company to establish its internal rules regarding the level or risk and return.
Recent decades have witnessed a sharp increase in the institutionally managed savings, both in absolute terms and relative to household financial wealth (Davis and Steil, 2001; BIS, 2003). As a result, institutional ownership is an increasingly dominant feature of developed financial markets. Delegated portfolio management is a complex phenomenon which encompasses different segments. The mutual fund industry is predominantly characterized by middle-aged households investing individually in sometimes relatively standardized products. By contrast, pension funds are predominantly managed by corporate treasures, who often delegate the asset management to a third party, thus creating an additional layer of agency. As emphasized by Lakonishok et al. (1992b), corporate treasures often make recourse to investment counsellors for reasons which go beyond the optimization of asset allocation. Non-economic factors such as handholding and generally direct interaction are likely to play an important role in the pension fund industry, while funds allocation is more based on past performance in the mutual fund industry. Another important stylized fact of the delegated portfolio management industry is the poor performance of active management compared with a passive benchmark (Malkiel, 1995; Gruber, 1996).
To begin, the stock market has been an arena notorious for its extreme wealth creation. In today's news, the small investor is inundated with information regarding particular countries, individual companies, and future macroeconomic predictions in regards to the stock market. With all this information, the small investor is left hopeless to sift through it all, in hopes of finding the particular asset that can secure retirement, pay for a child's education, or provide a stable life. To the small investor's detriment however, many of them do not have the time, expertise or inclination to study individual companies in hopes of determining which one merits his or her hard earned money. Even more important, the few dollars the investor does have to invest must be invested in a manner that does not lose him or her any money. In such instances, the investor must now work even harder to cover any loses incurred and still afford to live comfortably in retirement. As such, the investor forgoes this headache of stock picking and elects to give his money to a mutual fund manager. This action on the surface seems correct,
Our target customers will particularly be the small and medium investors who are unable to avail such services as most of the financial and advisory firms mostly deal with the big ticket investors and thus the small investors have no choice but to invest their assets in passive funds in investment management companies or mutual funds companies which are subjected to index and fund manager’s performance and thus may not bring expected returns. However recent evidence of systematic departures of asset prices in the from equilibrium values, as envisaged under the market efficiency, has renewed interest in ‘active’ fund management and investment advisory services and which entails that optimal selection of stocks, and the timing of
1. The returns used in this research are returns of mutual funds. So, we can only evaluate the stock-picking skill of all managers of funds, not skill of individual fund manager. 2. The returns used in this research are not the net returns, which already deducts management fee. So, there is possibility that the underperformed fund is caused by ineffective management of fund not from lack of manager‟s skill.
Fund management is the professional management of various securities (shares, bonds etc.) to meet specified investment goals for the benefit of the investors. Fund management companies play an important part in the development of securities market. Since the establishment of VietFund Management, the first fund management company in Vietnam in 2003, until now, 38 fund managers have been granted operation licenses by SSC. Among them, FPT Fund Management Joint Stock Company has the highest chartered capital with 110 billion VND and Lotus IMC has lowest charter capital with 5 billion VND.
1994 in terms of returns / benchmark comparison, diversification, selectivity and market timing skills. He concluded that the schemes failed to perform better than the market portfolio (ET’s ordinary share price index). Gupta and Sehgal (1997) evaluated mutual fund performance over a four year period, 1992-96. The sample consisted of 80 mutual fund schemes. They concluded that mutual fund industry performed well during the period of study. The performance was evaluated in terms of benchmark comparison, performance from one period to the next and their risk-return characteristics.