ALUATION OF MUTUAL FUNDS AND SELECTION ABILITIES OF FUND MANAGERS IN PAKISTAN

Rana Yasir Hussain, Haroon Hussain, Arshad Hassan

Abstract



Mutual funds are decent tools to encourage savings and
investments, especially in developing nations like Pakistan which
rely heavily on foreign aids. This study explores the mutual fund
performance in Pakistan by using seven different performance
measures, i.e. Sharpe, Treynor, Sortino, Information, Jensen Alpha,
M2/RAP, Fama decomposition measures. This study covers a period
ranging from July 2005 to June 2013 and includes 27 mutual fund
schemes out of which 20 funds are open ended while 07 funds are
closed ended. Results prove underperformance on the part of all the
mutual funds and the whole industry was found weak on the part of
the selection abilities of the fund managers and the portfolios were
found less diversified. However, it was noticed that closed ended funds
are better performers as compared to the open ended funds. Results
were also inconsistent for the performance of individual funds as
none of the funds had the same rankings with respect to all the measures
used.


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DOI: http://dx.doi.org/10.22555/pbr.v18i1.666

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