Equity mutual fund attributes and performance

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Journal Title
Journal ISSN
Volume Title
School of Business | Master's thesis
Date
2024
Department
Tieto- ja palvelujohtamisen laitos
Major/Subject
Mcode
Degree programme
Information and Service Management (ISM)
Language
en
Pages
70 + 2
Series
Abstract
This thesis explores the influence of various attributes on the performance of equity mutual funds, with a special focus on the Finnish investors’ perspective. The primary objective is to identify which fund characteristics significantly affect fund performance, thereby providing valuable insights for both individual and institutional investors. The research adopts a quantitative approach, utilizing panel regression analysis to examine the relationship between fund attributes such as fees, fund age, cashflows, past performance, and investment strategies, and their impact on abnormal fund returns. The findings reveal that certain attributes, notably recurring fees, have a significant inverse relationship with fund performance. Additionally, the study documents a mean-reversion effect in fund performance and establishes a positive relation between lagged fund cashflows and abnormal performance. The impact of the fund investment strategy on performance is also analyzed, demonstrating its considerable effect in explaining between-fund variations. These results have important implications for investors and fund managers, suggesting that a careful selection of funds based on specific characteristics can lead to better investment outcomes. While the study provides a robust analysis within the scope of the Finnish equity mutual fund market, its findings also open avenues for further research in broader contexts.
Description
Thesis advisor
Malo, Pekka
Keywords
equity mutual fund, fund performance, regression analysis, Finnish market
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