Funds Manager and Mutual Funds Characteristics on Mutual Funds Performance: Empirical Evidence of Equity Mutual Funds in Indonesia

Abstract

This study examines the effect of investment fund managers' characteristics in the form of tenure, and mutual fund characteristics with proxy turnover portfolios, market timing and stock selectivity on the performance of stock mutual funds. The research sample is 27 stock mutual funds in Indonesia that were active from 2013 to 2017. On the analysis of the relationships between the characteristics of investment managers and mutual funds characteristics on the performance of stock mutual funds, a series of OLS regressions were run. The panel data regression was included based on using the Eviews. All of the above were aimed at achieving portfolio optimization and realizing the maximization of the interests for fund management companies and investors. The main findings are as follows. Tenure does not affect the performance of stock mutual funds during the years 2013 to 2017, but if divided into 2 quadrants of tenure, namely tenure over 19 years and tenure under 19 years of work, the result is that tenure over 19 years has a positive effect on the performance of stock mutual funds, but tenure brought 19 years has no effect on the performance of equity funds, whereas mutual funds characteristics, which are proxied by portfolio turnover, market timing and stock selectivity, have a significant positive effect on the performance of equity funds in Indonesia. The primary limitation in the scope is the sample, because stock mutual funds that publish consistently Financial statements between 2013 and 2017 are few in number. These findings have important implications for fund management companies as input material that the investment strategy of the investment management team affects the performance of equity funds compared to the characteristics of investment managers with proxies for years of service. This paper proposes a new perspective to evaluate the relationship between the fund manager and mutual funds characteristicsanddivide 2 groups of working years, and calculate them with non-linear models.

Pengaruh Portfolio Turnover dan Stock Selection Skill Terhadap Kinerja Reksadana Campuran di Indonesia

“…Hasil ini sejalan dengan penelitian yang dianalisis oleh Lagu (2020) yang menemukan bahwa portfolio turnover berpengaruh positif dan tidak signifikan. Hasil penelitian ini tidak searah dengan penelitian yang dikaji oleh Manek (2016), Kaur (2018), dan Rachmawati et al, (2020) yang mengungkapkan bahwa portfolio turnover berpengaruh positif dan signifikan terhadap kinerja reksadana. Hasil penelitian yang tidak searah juga ditunjukkan oleh penelitian yang dilakukan Nguyen et al, (2018) yang menyatakan portfolio turnover berpengaruh negatif dan signifikan terhadap kinerja reksadana.…”

Association between fund attributes and fund's performance: a panel data approach

“…The focus had been on characteristics such as sponsorship of funds namely, public or private and Indian or foreign (Panwar and Madhumati, 2006), investment objective and fund structure (open-ended or closed-ended) and persistence in performance (Karoui and Meir, 2009;Arshdeep, 2011;Bawa and Brar, 2011;and Garg, 2014). The international evidence provides the other significant characteristics such as fund size, turnover ratio, NAV, expense ratio (Rachmawati et al, 2020;Low, 2010 andYap andPierce, 2008). Another study examined the performance of MFIs (Khan and Shireen, 2020).…”

“…Apart from the above characteristics, the study has also been conducted on other factors such as effect of fund manager's characteristics namely, education and experience on performance of mutual funds (Kaur, 2017 andRachmawati et al, 2020). Gang and Qian (2016) estimated the mutual fund performance for two time periods considering the risk factors.…”

Factors Affecting Stock Selection and Market Timing Ability Between the Developed Country and Emerging Countries in Asean Markets

“…An investment strategy is essential in managing equity mutual funds to deal with the market condition, investment risk, and investors' needs (Lucas & Sanz, 2016;Rachmawati, Wahyudi, & Pangestuti, 2020). Therefore, it is crucial to determine the right investment strategy for an equity mutual fund.…”