The impact of human capital efficiency on Latin American mutual funds during Covid-19 outbreak

Abstract

The mutual funds’ returns, inter alia, are dependent on fund managers’ performance. This makes human capital efficiency very central for consistent risk-adjusted performance. The persistence in performance becomes more critical during periods of high turbulence, like the one we are experiencing amidst the outbreak of Covid-19. In this research, we attempt to evaluate the performance of equity funds in massively impacted Latin American countries. These equity funds, with 95% of their investment in the infected region, are ranked as per their human capital efficiency using 2019 as the base year. Our findings demonstrate that funds with higher human capital efficiency significantly outperform their counterparts that rank lower on human capital efficiency. These findings remained consistent for the sub-periods that we specify to map the evolution of Covid-19. We conclude that equity funds should enhance their human capital efficiency to endure resilience amid macroeconomic shocks.

The impact of covid-19 on financial management: evidence from Romania

“…Supporting the same idea, Mirza et al (2020b) also work with a sample of European actively managed funds, for the first six months of the year 2020, proving that social entrepreneurship funds outperformed their counterparts during that time, so the researchers recommend social entrepreneurship funds as resilient and 'a viable contender in investment portfolios especially during periods of high volatility'. On regional subsamples of mutual funds, Mirza et al (2020c) study the effects of the pandemic upon the massively impacted Latin American countries from the point of view of the risk-adjusted performance of equity funds. By ranking these equity funds as per their human capital efficiency using 2019 as the base year, the researchers demonstrate the superior performances of higher human efficiency ranked funds as opposed to their counterparts.…”

COVID-19 pandemic, economic indicators and sectoral returns: evidence from US and China

“…Notes 1. For recent research work on the impact of COVID-19 on corporate world, firms, financial assets, commodities, crypto currency, asset management, investment, bankruptcy and credit portfolios see, Mirza et al (2020aMirza et al ( , 2020bMirza et al ( , 2020c, Rizvi et al (2020aRizvi et al ( , 2020b, Yarovaya et al (2020aYarovaya et al ( , 2020b, Arif et al (2021), Farid et al (2021, Naeem et al (2021aNaeem et al ( , 2021b, Shahzad, Naeem et al (2021), Yarovaya et al (2021). 2.…”

Predicting financial market returns in the presence of health crisis: evidence from conventional and Islamic stock markets

“…In the research about the performance evaluation of investment funds in the COVID-19 outbreaks, it is stated that especially social entrepreneurship funds provide high returns Rizvi et al, 2020). Investment funds of enterprises with high human capital efficiency also show high performance in the COVID-19 outbreak (Yarovaya et al, 2021;Mirza, Hasnaoui, et al, 2020). However, unlike the health crises experienced in the past, in the COVID-19 outbreak, volatility in the financial markets has increased too much (Baker et al, 2020).…”