New Mutual Fund Analysis

• Main Authors: Lin-Sheng Weng, 翁林聖
• Other Authors: Christine W. Lai
• Format: Others
• Language: en_US
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/27300765957895074450

碩士 === 元智大學 === 財務金融學系 === 94 === We examine 2510 equity new funds opened by top 60 fund families over the period 1993-2004 in the American mutual fund market. First, we find that overall report the long-term performance is better than short-term, but the performances of all groups were worse than S&P500 index return. Second, empirical result proves the crowding-out effect exists in the same fund family, that means it exists negative relationship between the flow change of new fund and the performance of other similar objective seasoned funds. In addition, we discuss the prevalence of cross-fund subsidization strategy which is fund families usually manipulate fund manager switch strategy to support new fund. Our empirical evidence shows that if the last experience of new fund manager comes from other irrelevant objective funds, its return might be positive. But no matter how new fund manager source, they don’t bring new money into family. Finally, we use the determinants of a fund opening to examine the short-term and long-term performance of new funds, and that we raise some suggestions for general investors and fund family. Furthermore, we hope to reduce the asymmetric information between general investors and fund family by our brief analysis.