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Actively managed Russian mutualfunds: Good or bad for investors?

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  • E. V. Inozemtsev
  • E. B. Tarassov

Abstract

The paper considers the degree of activity of Russian mutual funds. According to the results obtained, index funds on average deviate by 12% from their base index, while active funds deviate by 56%. It is shown that more active funds are more costly for the shareholders, but at the same time demonstrate a lower net profit adjusted for risk. The deviation of index funds from the base index leads to an even greater loss of profitability than in the case of active funds. The results show that active management of capital in Russia is experiencing difficulties both in terms of high fees and low profitability. Market underdevelopment and low competition create all the prerequisites for the existence of such a situation. As a solution, we propose to develop the market of passive capital management both by monitoring the prices of their products, and through measures aimed at increasing the understanding of the essence of passive management by the mass investor.

Suggested Citation

  • E. V. Inozemtsev & E. B. Tarassov, 2018. "Actively managed Russian mutualfunds: Good or bad for investors?," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 3.
    • Handle: RePEc:nos:voprec:y:2018:id:386
    DOI: 10.32609/0042-8736-2018-3-64-79
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