The impact of mutual funds’ ESG scores on their financial performance during the COVID-19 pandemic. A data envelopment analysis
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Purpose The purpose of this study is to evaluate the performance of mutual funds during the COVID-19 pandemic with environmental, social and governance (ESG) criteria. The main research question is whether mutual fund performance differs with respect to the level of the mutual fund’s ESG score. Design/methodology/approach The data set contains global fund data, and mutual fund performance is analyzed using two types of data envelopment analysis (DEA) models: the DEA portfolio index (DPEI) and the range direction measure (RDM) DEA. Propensity score matching and logistic regression are also applied. Findings The results reveal that: nonequity mutual funds present significantly higher performance compared to the performance of equity mutual funds; mutual funds with high ESG scores are associated with significantly higher performance compared to those with low to medium ESG scores; funds with high ESG scores experience higher performance irrespective of their type; and efficiency scores derived from the RDM DEA are significantly higher than those derived from the DPEI model. Research limitations/implications Investors, fund managers and market participants can benefit from the findings of this study and improve their investment decision-making process, including more sustainable funds in their portfolios. Regulators and policymakers should further promote or even require the inclusion of more sustainable investments in the financial products offered by institutional investors. The main limitation of the study is related to data availability regarding the ESG score of mutual funds. Originality/value To the best of the authors’ knowledge, this is the first study that provides robust evidence in support of a positive association between ESG scores and mutual fund performance during the pandemic-induced crisis applying a DEA methodology.Keywords:
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This paper first examines the similarities and differences in the determinants of the three mutual fund exit forms: liquidation, within-family merger, and across-family merger. All defunct mutual fund portfolios are shown to have smaller size and lower inflows. A family is less willing to liquidate a portfolio but more likely to merge a portfolio within the family if it offers more share classes. Large families are more likely to merge portfolios within the family, while a family with poor performance is more likely to sell relatively unique portfolios to other families to stay focused. This paper also investigates the effect of the share class composition of a portfolio on the likelihood of different exit forms and compares within-objective mergers with across-objective mergers.
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There has been growing importance of Mutual Fund Investment in India. When compared with other financial instruments, investments in Mutual funds are safer and also yields more returns on the portfolio investment. The focus of the study is to explore the factors that are responsible in increasing the Mutual Fund investment in India. The study also helps to understand the role of demographics in Mutual funds in India. This enables the fund managers to understand investment pattern and preferences of investor's behind investing in Mutual Funds. Further analysis of the study reveals that financial literacy of respondents is very important for making investment in Mutual funds. Therefore Mutual fund companies should promote financial awareness amongst the respondents so as to channelize their income and savings towards Mutual Funds.
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This article reviews the institutional characteristics of hedge funds based on their comparison with traditional collective investment schemes and investment funds. The study arrives at the conclusion that hedge funds are highly leveraged boutique investment funds of a quasi-open nature that apply active portfolio management in order to obtain high absolute yield regardless of the behavior of financial markets when conducting their activity in an environment of little transparency and legislative and institutional regulation.
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Why Mutual Funds? How Mutual Funds Work Types of Mutual Funds Developing Your Mutual Fund Investment Strategy Identifying Superior Funds Managing Your Fund Portfolio Monitoring Fund Performance Financing Your Retirement With Mutual Funds.
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Mutual funds, as the name indicates is the fund where in numerous investors come together to invest in various schemes of mutual fund. Mutual funds are dynamic institution, which plays a crucial role in an economy by mobilizing savings and investing them in the capital market, thus establishing a link between savings and the capital market. A mutual fund is an institution that invests the pooled funds of public to create a diversified portfolio of securities. Pooling is the key to mutual fund investing. Each mutual fund has a specific investment objective and tries to meet that objective through active portfolio management. This paper deals with comparative study of critical analysis of the private Vs public mutual funds schemes for the period of April 2012 to March 2013. Mutual funds, as the name indicates is the fund where in numerous investors come together to invest in various schemes of mutual fund. Mutual funds are dynamic institution, which plays a crucial role in an economy by mobilizing savings and investing them in the capital market, thus establishing a link between savings and the capital market. A mutual fund is an institution that invests the pooled funds of public to create a diversified portfolio of securities. Pooling is the key to mutual fund investing. Each mutual fund has a specific investment objective and tries to meet that objective through active portfolio management. Mutual fund as an investment company combines or collects money of its shareholders and invests those funds in variety of stocks, bonds, and money market instruments. The latter include securities, commercial papers, certificates of deposits, etc. Mutual funds provide the investor with professional management of funds and diversification of investment. Investors who invest in mutual funds are provided with units to participate in stock markets. These units are investment vehicle that provide a means of participation in the stock market for people who have neither the time, nor the money, nor perhaps the expertise to undertake the direct investment in equities. On the other hand they also provide a route into specialist markets where direct investment often demands both more time and more knowledge than an investor may possess. The price of units in any mutual fund is governed by the value of underlying securities. The value of an investor’s holding in a unit can therefore, like an investment in share, can go down as well as up. Hence it is said that mutual funds are subjected to market risk. Mutual fund cannot guarantee a fixed rate of return. It depends on the market condition. If the particular scheme is performing well then more return can be expected. It also depends on the fund manager expertise knowledge. It is also seen that people invest in particular funds depending on who the fund manager is.
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During the last few decades, the global financial scenario has witnessed several significant developments of which the initiation of new and innovative financial services is significant. A mutual fund means pooling the investments of a number of investors by way of investment in units of equal size. Mutual funds is known by different names in different countries. In the United Kingdom (UK), they are called “Investment Trusts” while in United States of America (USA) and most other countries, they are called “Investment Companies.” The mutual fund industry in the present context is characterized by an increasing number of players, competition between the public and private funds and the rising prominence of this financial instrument in the Indian financial market. Hence the present overview of the mutual funds in India in the present article.
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Abstract We show that institutional ownership in equity mutual funds predicts fund performance. Our measure of institutional ownership in mutual funds is directly from institutions’ quarterly 13(f) filings so it provides a broader coverage of institutional investment in mutual funds than existing studies. Most institutions holding mutual funds are independent investment advisors and bank trusts who invest in mutual funds on behalf of their clients. Our results show that funds held by institutions perform better than funds not held by institutions for at least 3 years. Institutions’ informational advantage is the main driver of the outperformance of institution‐held funds.
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There has been growing importance of Mutual Fund Investment in India. When compared with other financial instruments, investments in Mutual funds are safer and also yields more returns on the portfolio investment. The focus of the study is to explore the factors that are responsible in increasing the Mutual Fund investment in India. The study also helps to understand the role of demographics in Mutual funds in India. This enables the fund managers to understand investment pattern and preferences of investor’s behind investing in Mutual Funds. Further analysis of the study reveals that financial literacy of respondents is very important for making investment in Mutual funds. Therefore Mutual fund companies should promote financial awareness amongst the respondents so as to channelize their income and savings towards Mutual Funds. Index Terms — Mutual Funds, investment, preferences, companies, awareness, India
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