Literature Review On Mutual Funds

Literature Review On Mutual Funds-14
In 2005, the SEC adopted Rule S7-12-04, which requires mutual funds to disclose information on how their portfolio managers are compensated in their Statement of Additional Information (a document that they must provide to prospective investors upon request).In the working paper, “Portfolio Manager Compensation in the U. Mutual Fund Industry,” Linlin Ma, Yuehua Tang, and Juan-Pedro Gómez gather this data to evaluate the impact of mutual fund portfolio manager compensation structure on fund performance.

In 2005, the SEC adopted Rule S7-12-04, which requires mutual funds to disclose information on how their portfolio managers are compensated in their Statement of Additional Information (a document that they must provide to prospective investors upon request).In the working paper, “Portfolio Manager Compensation in the U. Mutual Fund Industry,” Linlin Ma, Yuehua Tang, and Juan-Pedro Gómez gather this data to evaluate the impact of mutual fund portfolio manager compensation structure on fund performance.

Oftentimes, when a mutual fund outsources the management of its portfolio, it will outsource it to an investment advisory firm that also has its own brand of funds. Google(); req('single_work'); $('.js-splash-single-step-signup-download-button').one('click', function(e){ req_and_ready('single_work', function() ); new c. We use cookies to make interactions with our website easy and meaningful, to better understand the use of our services, and to tailor advertising.The authors found that 77 percent of funds link the pay of their portfolio managers directly to the investment performance of the portfolios that they manage, and that they outperform their counterparts by 40 to 73 basis points per year, depending on metric of performance.The authors explain that this indicates that performance-linked bonuses are an effective mechanism of aligning the interest of the portfolio manager with that of his or her investors.For example, the authors showed that such firms place better trades in their own funds and more heavily weight their own funds’ portfolios toward stocks that recently had an initial public offering.Moreover, they will use the funds that they manage on behalf of other fund families as liquidity providers to cheaply accommodate a shock to redemption requests in their own mutual funds.In the present study, literature review on various dimensions with respect to the measurement of performance, risk - return trade off of mutual funds, and investors' awareness, education, and interest regarding mutual funds was examined to clear the gateway for the upcoming researchers in the field of the mutual fund industry.WHO WE ARE Black Rock’s purpose is to help more and more people experience financial well-being.Contact us if you experience any difficulty logging in. D., is an associate professor of investments in the Richard D. He is internationally known for his research on mutual funds and regularly teaches a course on mutual funds in The American College’s Master of Science in Financial Services program.

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