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Active management, fund size, and bond mutual fund returns
Author(s) -
Philpot James,
Hearth Douglas,
Rimbey James N.,
Schulman Craig T.
Publication year - 1998
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1998.tb01372.x
Subject(s) - bond , mutual fund , income fund , open end fund , business , closed end fund , equity (law) , returns based style analysis , fund of funds , finance , target date fund , passive management , financial economics , fund administration , economics , financial system , monetary economics , institutional investor , corporate governance , market liquidity , political science , law
Conventional wisdom holds that bonds are relatively homogenous investments compared to equities. Consequently, factors that explain variation in returns among bond mutual funds may differ in magnitude from those for equity mutual funds. In this study, a time‐series cross‐sectional analysis is employed to investigate the relationship between a bond fund's risk‐adjusted return and specific fund attributes. Results indicate that a bond fund's past performance does not predict future performance and that bond fund managers are generally ineffective at increasing risk‐adjusted returns. However, unlike equity mutual funds, bond mutual funds do appear to enjoy economies of scale.