Performance of Mutual Fund of Bangladesh

Many people don’t understand the process of investing; some people think you would have to work on Wall Street in order to understand the investing process. Even though the investing world has become more confusing than ever, Joe Mansueto saw an easier way of investing. Mr. Mansueto created an organization called Morning Inc. that would demonstrate an easier way of investing. Mansueto created a format that would cut around all unessassary information and aim directly for the relevant information. The company that Joe Mansueto established main focus is to research independent information for investments, financial advisor, and intuitional advisor (Ferrell, 2009). Morningstar’s mutual fund rating service is probably the most influential fund

There is one particular aspect about investment management that always intrigued me—the amount of freedom that investors give to investment managers. Take some funds that performs fairly well over a period of time, then investors are more willing to place their money into those funds. There may be given operating parameters for the funds, but down at the very micro-level, the managers still has great discretion over what securities they chooses. Freedom is also present in what strategies managers can choose to employ. Risk can be adjusted according to investor appetite and/or the managers’ investment outlooks. The different combination of these factors give rise to the plethora of funds that are available in the market. In the end, the freedom creates an interesting, and nonetheless, competitive environment to work in.

Mutual fund also offers good investment opportunities to the investors. Like all investment, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The Indian mutual fund industry has witnessed several structural and regulatory reforms.

For individual investors who don’t have time to study and research investments, mutual funds are the best option for reaping the benefits of diversified investments with minimum effort. In most funds, it is possible to start investing with as little as a few hundred rupees. Also, unlike many other investments, mutual fund investments are generally liquid in nature and can be redeemed without any delay.

HENRIKSSON, R. D. 1984. Market timing and mutual fund performance: An empirical investigation. Journal of business, 73-96.

Most investors pick mutual funds based on recent fund performance, the suggestion of a friend, and/or the praise bestowed on them by a financial magazine or fund rating agency. While using these methods can lead one to selecting a quality fund, they can also lead you in the wrong direction and wondering what happened to that "great pick."

‘Portfolio theory and the capital asset pricing model (CAPM) are essential tools for portfolio managers and other stock market investors’

Also edited by Greg N. Gregoriou ADVANCES IN RISK MANAGEMENT ASSET ALLOCATION AND INTERNATIONAL INVESTMENTS DIVERSIFICATION AND PORTFOLIO MANAGEMENT OF MUTUAL FUNDS PERFORMANCE OF MUTUAL FUNDS

It took another 150 year for pooled investments to arrive to the United States. On March 21, 1924, Massachusetts Investors Trust launched the first modern day mutual fund, providing individual investors with a cost effective way to achieve a diversified portfolio. Moreover, individual investors gained the benefit of having their investments managed by professionals. Since then, academics and practitioners alike have debated ad nauseam the value-add delivered by fund managers. Jensen (1968) evaluated the performance of mutual funds from 1945 to 1964 and concluded that on average, fund managers were not able to predict security prices well enough to outperform the market. Concurring with Jensen, Samuelson (1974) found that it was nearly impossible to find a fund manager who can outperform the market by holding a subset of securities of the market. Henceforth, Samuelson advocated for the creation of a naïve portfolio that tracks the S&P 500 Index (a market proxy). On August 31, 1976, the Vanguard Group launched the first index fund for individual investors, the First Index Investment Trust. The introduction of this index fund initiated the active-passive debate; the persistent dialogue around mispriced securities sustains

Becoming major suppliers of funds in the financial market, mutual funds have become a very popular investment in recent years. Because of the diversity of investments, portfolio management’s expertise, and liquidity, mutual funds have grown rapidly over the past few years. One of the most popular group’s investing in mutual funds is people with self-driven retirement plans. This provides professionally handled money and pooled risk. There are more than 8,000 different mutual funds, with more than 88 million households owning shares of one or more.

Two funds were chosen in order to determine the performance of each investment by observing the risk and significance of fund management fees. In order to achieve the highest level of accuracy possible, the two funds were chosen in the same sector of the market and of equal size and investment strategy. One fund chosen was an open-ended actively managed mutual fund, and the other a close-ended passively managed exchange traded fund.

Indro et al. (1999) became a pioneer in the field on dividing the type of fund managers, separate analysis open-end fund managers. They argue that if the fund’s profit is lower than the average at the same time, it will face great difficulties in attracting new investors and keeping mature investors. Niessen-Ruenzi and Ruenzi (2006) found that male fund managers tend to risky investment style, conversely

Based on these results we could argue that the mutual funds do not follow the market closely, but both Managers over-perform the index. Furthermore, in order to test whether or not we have viable explanatory coefficients, a t-testing procedure was followed(Table 2). Using a 5% significance level, all coefficients except the market beta of Mutual Fund 1 are statistically significant. The low R2 in both mutual funds implies that their returns are less well explained by the Benchmark’s movements. However, Titman and Tiu(2011) suggest that low R-squares likely indicate more active management; either departing from a Benchmark or focusing on stocks with larger fractions of variance attributed to firm-specific information.

To begin, the stock market has been an arena notorious for its extreme wealth creation. In today's news, the small investor is inundated with information regarding particular countries, individual companies, and future macroeconomic predictions in regards to the stock market. With all this information, the small investor is left hopeless to sift through it all, in hopes of finding the particular asset that can secure retirement, pay for a child's education, or provide a stable life. To the small investor's detriment however, many of them do not have the time, expertise or inclination to study individual companies in hopes of determining which one merits his or her hard earned money. Even more important, the few dollars the investor does have to invest must be invested in a manner that does not lose him or her any money. In such instances, the investor must now work even harder to cover any loses incurred and still afford to live comfortably in retirement. As such, the investor forgoes this headache of stock picking and elects to give his money to a mutual fund manager. This action on the surface seems correct,

Portfolio management is making decisions in relation to investment mix and policy, asset allocation for individuals and institutions and balancing risk against performance. This includes the strengths, weaknesses, opportunities and threats in the choice of domestic vs. international, growth vs. safety, and many other trade-offs encountered in the attempt to maximize return given the client’s risk tolerance. (Haughey, 2014)