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How to choose investments that match your needs? A proposal for the categorization of mutual funds for Latin American emerging markets, case of Costa Rica

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  • Zheng-Guo, Maiko
  • Hernández-Ramírez, Manrique
  • Solís, Martín

Abstract

Mutual funds are frequently classified according to their investment objective; however, this methodology does not guarantee that the products formed in the same group have a similar level of return, risk, and performance. For this reason, this study proposes a classification method using the conglomerate analysis technique for the 92 mutual funds in the Costa Rican market. As a result, it was possible to separate the 92 mutual funds into 8 different groups by the grouping method called partition around medoids (PAM). This proposal can facilitate investors and other actors better strategic planning and decision making from a financial perspective.

Suggested Citation

  • Zheng-Guo, Maiko & Hernández-Ramírez, Manrique & Solís, Martín, 2023. "How to choose investments that match your needs? A proposal for the categorization of mutual funds for Latin American emerging markets, case of Costa Rica," Revista de Ciencias Económicas, Instituto de Investigaciones en Ciencias Económicas, Universidad de Costa Rica, vol. 41(1), January.
    • Handle: RePEc:rce:rvceco:49426
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    References listed on IDEAS

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    1. Gabriela Pesce & Juan Ignacio Redondo & Gastón S. Milanesi & Joaquín Menna & Ricardo Amarilla, 2018. "Índice multifactorial para la evaluación del desempeno financiero de fondos comunes," Estudios Gerenciales, Universidad Icesi, vol. 34(147), pages 200-215, May.
    2. Moreno, David & Marco, Paulina & Olmeda, Ignacio, 2006. "Self-organizing maps could improve the classification of Spanish mutual funds," European Journal of Operational Research, Elsevier, vol. 174(2), pages 1039-1054, October.
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