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Assessing the performance of mutual funds

Author

Listed:
  • Constantin ANGHELACHE

    (Bucharest University of Economic Studies, Romania)

  • Mădălina-Gabriela ANGHEL

    (Artifex University of Bucharest, Romania)

  • Ștefan Virgil IACOB

    (Artifex University of Bucharest, Romania)

  • Iulian RADU

    (Bucharest University of Economic Studies, Romania)

Abstract

An open-ended mutual fund is an institution designed to provide both diversification and professional management at a relatively low cost. The directors consider issuing new shares or withdrawing old shares at any time, depending on the evolution of the capital market. In this context, in the article we started from identifying the possibilities to consider mutual portfolios as diversified ones, being included, as a rule, over 100 different titles. This is due more to the size of the fund than to the desire to minimize risk. In these circumstances, given that most funds diversify extensively, volatility should provide a good arrangement for variability to ensure a fairly high return on capital market placement. The purpose of this article was to clarify the issues related to these mutual funds, so that the analysis focuses on determining what is the prospect of achieving a reasonable return from the point of view of the holder of the invested portfolios. The methodology used was, by taking brief but important examples, what the situations are and how the mutual portfolios placed on the market behave. We used the graphical representations, but also a method of analysis by using the Dow-Jones portfolio, consisting of 23 funds with low rates. We also used the logical method of interpreting and comparing the results obtained in different circumstances, indicating through some models what should be the analytical capacity of investors of asset portfolios on the capital market.

Suggested Citation

  • Constantin ANGHELACHE & Mădălina-Gabriela ANGHEL & Ștefan Virgil IACOB & Iulian RADU, 2022. "Assessing the performance of mutual funds," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(631), S), pages 175-186, Summer.
  • Handle: RePEc:agr:journl:v:2(631):y:2022:i:2(631):p:175-186
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    References listed on IDEAS

    as
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