one of the main functionalities of capital market is to improve liquidityin the market which provides security for the investors. mutual funds aremodern financial institutions which are designed with the aim of collectingfunds from investors and devote them to buy a variety of securities inorder to mitigate investment risks, exploit the economies of scale andfinally create a reasonable return f...

One of the main functionalities of capital market is to improve liquidityin the market which provides security for the investors. Mutual funds aremodern financial institutions which are designed with the aim of collectingfunds from investors and devote them to buy a variety of securities inorder to mitigate investment risks, exploit the economies of scale andfinally create a reasonable return f...

This note reviews the literature on fund performance. A practical way of gauging market efficiency is to attempt to identify above-average risk-adjusted returns from one or more market participants that are the result of skill, as opposed to luck. If any such returns are identified, then the market is not efficient. In practice, such a test is best performed by seeking persistence in the return...

H alf of all of U.S. households own shares in one or more mutual funds, either directly or through personal or employer-sponsored retirement accounts. The growth in mutual fund investment has been dramatic. At the end of World War II, there were 73 mutual funds registered with the Securities and Exchange Commission holding $1.2 billion in assets (Investment Company Institute, 2003). By the end ...

This paper develops a continuous-time model in which a portfolio manager is hired by a management company. Based on past portfolio returns, all agents update their beliefs about the manager’s skills. In response, investors can move capital into or out of the mutual fund, the portfolio manager can alter the risk of the portfolio and the management company can replace the manager. We examine the ...