Diversification and Portfolio Management of Mutual Funds (Finance and Capital Markets Series)

This significant new book addresses the important issue of diversification in an age where it is vital to reduce volatility on investments. Properly applied portfolio management can lead to greater gains. The expert authors guide investors through international portfolio diversification, make clear how to help improve the efficiency of their investments, and explain how international diversification reduces the risk of an investment portfolio. This key book educates investors about how international mutual finds enhance the performance of their portfolio. The authors analyze which factors are most essential to investors, and find that both financial factors and behavioural arguments must be considered. This book is a crucial tool for any investor looking to improve the profit gain from their investment. Cover......Page 1 Contents......Page 8 Acknowledgments......Page 13 Notes on the Contributors......Page 14 Introduction......Page 24 1.1 Introduction......Page 28 1.2 Art as an asset......Page 29 1.3 Art mutual funds......Page 32 1.4 Art price data qualifications......Page 35 1.5 Conclusion......Page 42 2.1 Introduction......Page 45 2.2 FOF background and data......Page 48 2.3 The data......Page 55 2.4 Empirical results......Page 59 2.5 Conclusion......Page 74 3.1 Introduction and related work......Page 84 3.2 Data......Page 89 3.3 Empirical analysis......Page 92 3.4 Conclusion......Page 100 4.1 Introduction......Page 105 4.2 The efficiency model and estimates......Page 106 4.3 Monetary policy sensitivity of international indices......Page 111 4.4 International mutual funds efficiency and monetary policy......Page 116 4.5 Conclusion......Page 119 5.1 Introduction......Page 121 5.2 Portfolio construction: the main steps......Page 123 5.3 Back-testing methodology and datasets features......Page 136 5.4 Main results......Page 139 5.5 Conclusion......Page 145 6.1 Introduction......Page 148 6.2 The new Morningstar fund-rating approach......Page 150 6.3 Improvements and limitations......Page 154 6.4 Conclusion......Page 160 7.1 Introduction......Page 165 7.2 Portfolio selection and exogenous returns......Page 168 7.3 Portfolio selection and endogenous returns......Page 170 7.4 Numerical analysis......Page 172 7.5 Implications and hypotheses......Page 178 7.6 Empirical analysis......Page 182 7.7 Conclusion......Page 188 8.1 Introduction......Page 194 8.2 Hypotheses and methodology......Page 197 8.3 Data......Page 201 8.4 Results......Page 204 8.5 Conclusion......Page 213 9.1 Introduction......Page 225 9.2 ETF structure......Page 226 9.3 The anti-delegation rule......Page 229 9.4 Conclusion......Page 231 10.1 Introduction......Page 233 10.2 Data description......Page 237 10.3 Methodology......Page 240 10.4 Relationship between flows and performance relative to the stated objective category......Page 243 10.5 Relationship between flows and performance relative to the stated objective, Morningstar style, and asset class categories......Page 246 10.6 Relationship between flows and ordinal as well as cardinal measures of performance......Page 251 10.7 Category-specific flow spillover effect from a star fund to the other funds in the family......Page 253 10.8 Conclusion......Page 255 11.1 Introduction......Page 259 11.2 Industry-sector mutual funds......Page 262 11.3 Sample and descriptive statistics......Page 263 11.4 Average returns of momentum portfolios......Page 267 11.5 The performance of momentum portfolios......Page 272 11.6 Additional investigations......Page 275 11.7 Conclusion......Page 279 12.1 Introduction......Page 283 12.2 Background......Page 284 12.3 Fund offerings......Page 285 12.4 Fund governance......Page 286 12.5 Disclosure requirements......Page 288 12.6 Fund fees......Page 291 12.7 Distribution compensation......Page 292 12.8 Pricing, sales and redemptions......Page 293 12.9 Affiliated transactions......Page 295 12.10 Money market funds......Page 296 12.11 Conclusion......Page 297 13.1 Introduction......Page 299 13.2 The mutual fund industry in Spain......Page 303 13.3 Data......Page 304 13.4 Models of performance evaluation......Page 307 13.5 Empirical results......Page 309 13.6 Conclusion......Page 335 14.1 Introduction......Page 339 14.2 Economic framework......Page 340 14.3 The tax puzzle......Page 341 14.4 The database......Page 342 14.5 Empirical results......Page 344 14.6 Conclusion......Page 351 15.1 Introduction......Page 361 15.2 Importance of corporate governance for mutual funds......Page 365 15.3 History of mutual funds in Pakistan......Page 366 15.4 Code of corporate governance in Pakistan and international best practices......Page 368 15.5 Conclusion......Page 377 16.1 Introduction......Page 380 16.2 Social security reforms in Italy......Page 384 16.3 Empirical evidence on pension funds underwriting......Page 386 16.4 Some implications for portfolio management of pension funds......Page 393 16.5 Conclusion......Page 397 17.1 Introduction......Page 400 17.2 Agency problems associated with information asymmetries between managers and mutual fund investors......Page 401 17.3 Data and methodology......Page 408 17.4 Results......Page 409 17.5 Conclusion......Page 412 18.1 Introduction......Page 416 18.2 The role of mutual funds in the future of financial activity......Page 418 18.3 The influence of behavioral factors in investor decisions to choose mutual funds......Page 421 18.4 Empirical analysis......Page 423 18.5 Conclusion......Page 431 B......Page 436 C......Page 437 F......Page 438 G......Page 439 I......Page 440 M......Page 441 P......Page 442 R......Page 443 S......Page 444 W......Page 445 Z......Page 446 This book addresses the importance of diversification for reducing volatility of investment portfolios. It shows how to improve investment efficiency, and explains how international diversification reduces overall risk while enhancing performance. This book is a crucial tool for any investor looking to improve the profit gain from their investment.