Impacts of Size on Mutual Funds Performance
Tran Dieu, Linh
Impacts of Size on Mutual Funds Performance - 2019.
32
Weanalyze the impact of fund size on fund performance. Using a sample of equity funds in the French market for the period from 2002 to 2014, we obtain a U-inverse relation between these two variables. Fund performance increases first and then decreases with fund size as assets under management reach a critical size. This result highlights the conflict of interest between investors and fund managers. Being payed a percentage of assets under management, fund managers try to maximize the fund’s size. An increase in fund assets, favorable to the manager, may negatively impact fund performance. Classement JEL: G20, G23, G20.
Impacts of Size on Mutual Funds Performance - 2019.
32
Weanalyze the impact of fund size on fund performance. Using a sample of equity funds in the French market for the period from 2002 to 2014, we obtain a U-inverse relation between these two variables. Fund performance increases first and then decreases with fund size as assets under management reach a critical size. This result highlights the conflict of interest between investors and fund managers. Being payed a percentage of assets under management, fund managers try to maximize the fund’s size. An increase in fund assets, favorable to the manager, may negatively impact fund performance. Classement JEL: G20, G23, G20.
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