Categorizing Mutual Funds Using Clusters
نویسندگان
چکیده
We classify mutual funds using cluster analysis and examine whether the categories created by clusters are the same as those assigned by the invest ment objectives Since mutual funds are usually classi ed based on their investment objectives clustering funds based on their nancial characteris tics rather than their investment objectives could explain why some mutual funds do not perform according to their investment objectives After cluster ing we nd that some of the investment categories are insigni cantly di er ent from others in terms of their nancial characteristics Maintaining more investment categories than necessary causes ine ciency for the nancial an alysts and mutual fund managers because the bene ts of diversi cation can not be achieved by investing in di erent categories of funds Categorizing Mutual Funds using Clusters
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