Australian Equity Mutual Fund Size Effects

27 Pages Posted: 25 Aug 2007

Multiple version iconThere are 2 versions of this paper

Date Written: August 25, 2007

Abstract

The relative performance of small versus large funds has generated some interest in the literature yet there is little empirical evidence to support the existence of superior small fund performance relative to large fund performance. Berk and Green (2004) provide one explanation. They argue that, with a limited population of superior fund managers and a competitive investor market, the superior fund managers capture the value they generate while the funds pay a normal return to their investors. Empirical tests in this paper generally support the Berk and Green (2004) arguments. In particular, tests using Australian Morningstar retail and wholesale equity fund data from 1995 to 2005 identify a positive correlation between previous period returns and asset growth and a negative correlation between asset growth and fund age.

Keywords: wholesale equity funds, size effects

JEL Classification: F21, G11, G23

Suggested Citation

Heaney, Richard A., Australian Equity Mutual Fund Size Effects (August 25, 2007). Available at SSRN: https://ssrn.com/abstract=1009761 or http://dx.doi.org/10.2139/ssrn.1009761

Richard A. Heaney (Contact Author)

University of Western Australia ( email )

Crawley
Perth, Western Australia 6009
Australia
0414700799 (Phone)

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