What Affects a Taiwan Fund Company’s Operating Performance? An Analysis on Market Share

Abstract

This study aims to explore the factors that affect the operating performance of 37 Taiwan fund companies by examining monthly data from open-end domestic equity funds and balanced funds from January 2001 to April 2013. The market share of domestic equity funds and balanced funds is used as the proxy variable to measure a company's operating performance. The results show that there is a significant difference in market share between foreign and domestic fund companies. The age of the fund company, the average turnover rate, and the number of people subscribing for dollar-cost-averaging investment plans are found to be positively related to a company's market share, while the average rates of transaction cost and management fee are negatively related to the market share. We also find that star funds have a significantly positive effect on the market share of a mutual fund company.