The Value of Mutual Fund Rankings to the Individual Investor

1999 ◽  
Author(s):  
Miranda L. Detzler
Keyword(s):  
Mutual Fund ◽  
Individual Investor ◽  
The Individual

scholarly journals Creating Mutual Fund Transparency: The Elimination Of Deceptive Communication

2010 ◽  
Vol 8 (6) ◽  
Author(s):  
Brian D. Fitzpatrick
Keyword(s):  
Mutual Fund ◽  
Individual Investor ◽  
Past Performance ◽  
Fund Managers ◽  
Time Period ◽  
Fund Families ◽  
Mutual Fund Families ◽  
Total Profit ◽  
One Year ◽  
The Individual

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="color: black; font-size: 10pt;"><span style="font-family: Times New Roman;">While the SEC debates the overall merits of forming mutual fund company boards with an independent chairman to go along with 75% make-up of independent board members, I question how this is going to create more transparency for the individual investor.<span style="mso-spacerun: yes;">&nbsp; </span>The real culprit is the flexibility given to mutual fund companies in allowing them to set fees as permitting trading within funds has confused the true cost to the consumer and has added insult to injury.<span style="mso-spacerun: yes;">&nbsp; </span>Dr. Edward O&rsquo;Neal at Wake Forest states that &ldquo;the average fund managers cannot recoup these expenses in the form of better performance.&rdquo;<span style="mso-spacerun: yes;">&nbsp; </span>Gaspar, Massa and Matos (2006) brilliantly show that mutual fund families tend to charge various levels of fees on its member funds, forcing different funds to contribute unequally to the total profit.<span style="mso-spacerun: yes;">&nbsp; </span>They found that during the January 1991 to July 2001 time period, high value funds (i.e., high fees or high past performance) are favored inside fund families by 6-28 basis points of extra net-of-style performance per month (.7% - 3.3% per year) relative to the low value funds (i.e., low fees or low past performance), based on the criteria they used (i.e., fees or past performance).<span style="mso-spacerun: yes;">&nbsp; </span>How can all these deceptive practices be eradicated?<span style="mso-spacerun: yes;">&nbsp; </span>The author proposes a five-step &ldquo;absolute&rdquo; process in order to create mutual fund transparency:<span style="mso-spacerun: yes;">&nbsp; </span>the elimination of all soft dollar arrangements; creation of a mutual fund separateness statue to eliminate what Gaspar, Massa and Matos (2006) call the strategic Cross-Fund Subsidization; terminate all 12-B1 fees; eliminate all &ldquo;rolling performance periods&rdquo; by forcing one-year calendar performance periods with mandatory fee return to investors if the manager underperforms; and outlaw all front-end and back-end loads, thus forcing marketers to charge a direct commission.<span style="mso-spacerun: yes;">&nbsp; </span>The goal of any transparent system is to protect the consumer, and the individual investor can only be protected by implementing &ldquo;absolute standards&rdquo; that will allow no &ldquo;wiggle room&rdquo; for mutual fund companies.</span></span></p>

Marketing to the Individual Investor

1988 ◽  
Vol 1988 (5) ◽  
pp. 53-58
Author(s):  
Richard B. Ross
Keyword(s):  
Individual Investor ◽  
The Individual

The Individual Investor After October 19, 1987

1988 ◽  
Vol 1988 (5) ◽  
pp. 29-31 ◽  
Author(s):  
Laurence A. Manchester
Keyword(s):  
Individual Investor ◽  
The Individual

Survey of Trading Systems for Individual Investors

2011 ◽  
pp. 157-176 ◽  
Author(s):  
M. Kersch ◽  
G. Schmidt
Keyword(s):  
Financial Markets ◽  
Stock Exchange ◽  
Point Of View ◽  
Individual Investors ◽  
Individual Investor ◽  
Trading System ◽  
Trading Systems ◽  
Trading Decisions ◽  
The Individual

Trading decisions in financial markets can be supported by the use of trading algorithms. To evaluate trading algorithms and to generate orders to be executed on the stock exchange trading systems are used. In this chapter, we define the individual investors’ requirements on a trading system, and analyze 17 trading systems from an individual investor’s point of view. The results of our study point out that the best alternative for an individual investor is not one single trading system, but a combination of two different classes of trading systems.

A study of prominence for disposition effect: a systematic review

2019 ◽  
Vol 11 (1) ◽  
pp. 2-21 ◽  
Author(s):  
Syed Aliya Zahera ◽  
Rohit Bansal
Keyword(s):  
Mutual Funds ◽  
Behavioral Finance ◽  
Mutual Fund ◽  
Institutional Investors ◽  
Disposition Effect ◽  
Individual Investors ◽  
Content Type ◽  
Experimental Market ◽  
The Individual ◽  
The Impact

Purpose The purpose of this paper is to study the disposition effect that is exhibited by the investors through the review of research articles in the area of behavioral finance. When the investors are hesitant to realize the losses and quick to realize the gains, this phenomenon is known as the disposition effect. This paper explains various theories, which have been evolved over the years that has explained the phenomenon of disposition effect. It includes the behavior of individual investors, institutional investors and mutual fund managers. Design/methodology/approach The authors have used the existing literatures from the various authors, who have studied the disposition effect in either real market or the experimental market. This paper includes literature over a period of 40 years, that is, Dyl, 1977, in the form of tax loss selling, to the most recent paper, Surya et al. (2017). Some authors have used the PGR-PLR ratio for calculating the disposition effect in their study. However, some authors have used t-test, ANNOVA, Correlation coefficient, Standard deviation, Regression, etc., as a tool to find the presence of disposition effect. Findings The effect of disposition can be changed for different types of individual investors, institutional investors and mutual funds. The individual investors are largely prone to the disposition effect and the demographic variables like age, gender, experience, investor sophistication also impact the occurrence of the disposition effect. On the other side, the institutional investors and mutual funds managers may or may not be affected by the disposition effect. Practical implications The skilled understanding of the disposition effect will help the investors, financial institutions and policy-makers to reduce the adverse effect of this bias in the stock market. This paper contributes a detailed explanation of disposition effect and its impacts on the investors. The study of disposition effect has been found to be insufficient in the context of Indian capital market. Social implications The investors and society at large can gains insights about causes and influences of disposition effect which will be helpful to create sound investment decisions. Originality/value This paper has complied the 11 causes for the occurrence of disposition effect that are found by the different authors. The paper also highlights the impact of the disposition effect in the decision-making of various investors.

scholarly journals Effect of F Score on Stock Performance: Evidence from Indian Equity Market

2017 ◽  
Vol 9 (2) ◽  
pp. 89
Author(s):  
Trilochan Tripathy ◽  
Bijon Pani
Keyword(s):  
Stock Returns ◽  
Mutual Fund ◽  
Indian Market ◽  
Stock Valuation ◽  
Stock Performance ◽  
Return On Equity ◽  
Value Investing ◽  
Fund Managers ◽  
The Individual ◽  
The Impact

This study seeks to examine whether value investing strategy based on F Score when applied to high book to market firms can significantly shift the current and future stock performance in favour of the investor in the Indian market. The study engages the panel data model to analyse the impact of high F Score on contemporaneous and future stock returns (Rt and Rt+1), return on equity (ROEt and ROEt+1) and market to book value (MTBVt and MTBVt+1) as stock performance measures. The study concludes that high book to market firms with high F Score can shift the distribution of contemporaneous and future stock performances in favour of investors in the Indian market. However such observation is most prominent and statistically significant at higher level when applied to future stock valuation measures than the future stock return as measures of stock performance. The outcome of the study would no doubt help the individual value investors, mutual fund managers and value investing strategists who have presence in the Indian market.

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