The Performance of Mutual Funds: Academic Evidence
- Topics:
- Commercial Lending
- Tags:
- Human Resources,
- Money Manager,
- Mutual Fund,
- Performance,
- Performance Management,
- Venus Capital Management,
- Workforce Management
- Source:
- Venus Capital Management
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Overview: Measuring the persistence of Mutual funds performance has been the goal of many academic studies for the last three decades. Managers of actively managed portfolios are expected to consistently outperform a benchmark. To demonstrate their ability in generating excess returns (i.e., positive alphas), money managers have to rely on their past performance. Investors who invest with these managers and people who evaluate money managers (e.g., Morningstar) have to rely on past performance data as well. If past performance can predict future performance, then a portfolio consisting of best performing managers should consistently outperform a randomly selected portfolio of money managers. This paper reviews the available academic evidence on the persistence of performance for actively managed portfolios. It uses more recent data to determine if the persistence detected during 1970s and 1980s, also prevailed during late 1990s and overflowed until 2002.
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Format: PDF | Size: 474KB | Date: Apr 2003 | Pages: 16
