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Equity mutual funds performance in Pakistan: risk & return analysis

Author

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  • Raza, Syed Ali
  • Raza, Syed Aoun
  • Zia, Abassi

Abstract

The purpose of this study is to find the performance of the Pakistani mutual fund industry. The performance of these funds can be considered to be very good relative to the market portfolio. This research study is focused on Secondary source of data. Analysis apply will require to investigate the related matters of research, which includes the related data of profitability ratios comprising of 12 Asset management companies (AMCs) annual reports in different time period from 1999 to 2009 using yearly returns of the different Mutual Funds. The multiple regression method is used in this paper for the performance of the funds. The results of this research explain that Market Portfolio (MP), Pakistan Investment Bonds (PIBs) are having positive and significant impact on Yearly Return (YR) of different Mutual Funds but dividends (DIV) is having negative and insignificant impact on yearly return of mutual funds, so it is recommended that it is still in early days of mutual funds in Pakistani market. The dividend had always a negative impact on the yearly returns (YR) of mutual funds because the Net Asset Value (NAV) is decreasing after giving dividend at the end of the fiscal year. This study will also add to the body of knowledge as it can be a useful reference to other researchers who are keen to carry out studies on the performance of other types of Mutual Funds in Pakistan.

Suggested Citation

  • Raza, Syed Ali & Raza, Syed Aoun & Zia, Abassi, 2011. "Equity mutual funds performance in Pakistan: risk & return analysis," MPRA Paper 36804, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36804
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    References listed on IDEAS

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    2. Timo P. Korkeamaki & Thomas I. Smythe, 2004. "Effects of Market Segmentation and Bank Concentration on Mutual Fund Expenses and Returns: Evidence from Finland," European Financial Management, European Financial Management Association, vol. 10(3), pages 413-438, September.
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    6. McLeod, Robert W & Malhotra, D K, 1994. "A Re-examination of the Effect of 12B-1 Plans on Mutual Fund Expense Ratios," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 17(2), pages 231-240, Summer.
    7. Dahlquist, Magnus & Engström, Stefan & Söderlind, Paul, 2000. "Performance and Characteristics of Swedish Mutual Funds," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 35(3), pages 409-423, September.
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    9. Syed ali, Raza & Syed tehseen, jawaid & Imtiaz, arif & Fahim, qazi, 2011. "Validity of capital asset pricing model: evidence from Karachi stock exchange," MPRA Paper 32737, University Library of Munich, Germany.
    10. Livingston, Miles & O'Neal, Edward S, 1998. "The Cost of Mutual Fund Distribution Fees," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 21(2), pages 205-218, Summer.
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    Cited by:

    1. Gibson L.K. Daasi & Favour Amarachi Dimoji & Alobari Collins & Zukbee Sira, 2015. "Macroeconomics Variables and Stock Market Performance in Nigeria," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 4(5), pages 312-317.
    2. Pius V. C. Okoye & Jane F. N. Okoye & Raymond A. Ezejiofor, 2015. "The Impact of Capital Market Efficiency as a Panacea to the Economic Growth in Nigeria," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 4(3), pages 122-134.
    3. Meriem Rjiba & Michail Tsagris & Hedi Mhalla, 2015. "Bootstrap for Value at Risk Prediction," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 4(6), pages 362-371.
    4. repec:ksb:journl:v:10:y:2017:i:1:p:57-80 is not listed on IDEAS
    5. Farah Naz & Hafsa Khan & Muhammad Ishfaq Ahmad & Ramiz Ur Rehman & Muhammad Akram Naseem, 2019. "Productivity and efficiency analysis of Pakistani mutual funds using Malmquist index approach," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 1-21, September.
    6. Samiuddin Shaikh & Aisha Bashir Shah & Fawad Ashraf, 2017. "Credit Obtaining Challenges Faced by Micro and Small and Medium Enterprises SMEs," KASBIT Business Journals (KBJ), Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 10, pages 57-80, December.
    7. Syed Faizan Ahmed & Dr. Riaz Hussain Soomro, 2017. "Analyzing Performance of Islamic and Conventional Funds Listed In Karachi Stock," KASBIT Business Journals (KBJ), Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 10(Special I), pages 6-30, May.

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    More about this item

    Keywords

    Yearly Return of Mutual Funds; Dividends; Market Portfolio; Pakistan Investment Bonds; and Net Asset Value;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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