A study on assessing and critiquing ways of selecting equity fund managers
Loading...
Files
Date
2012-04
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
The British university in Dubai (BUiD)
Abstract
The research could be premature to some of the financial industries such as the UAE, as mutual fund management as a brand and business is still in the pioneer level of the industry cycle. The research might be more applicable to the institutions and high net worth individuals that would like to gain exposure and obtain alpha from abroad markets that have a developed Mutual funds business such as US,UK or some of the Asian countries. The external fund investment is very broad as it can touches upon any investment asset class. During this research focus was on the equity part that might share some similarity with the other asset classes. The objective of the research is to provide a framework or a process to assess and critique the selection of external funds in the mutual fund industry. Also, to get a ranked criteria during different market conditions that will provide is the criteria is static during market conditions is it more of a dynamic and how much does market cycle affect the fund manager criteria.
The research has been conducted through covering the available academic research of fund manager selection criteria and books that are written by researchers who research mutual funds and rate them. After consolidating the available criteria from academia, provided a short explanation for each in the literature as a summary. After all of the data gathering and critique, 8 criteria were selected to be rated by external parties. The approach to get the results was to do a questionnaire that will be focusing on eight criteria and three market conditions (Trough, Middle, Peak) market cycle. The aim of providing different market conditions is to stress the criteria whether it will hold as a rank through the three market conditions. The questionnaire will be sent to external parties that have a good network with through my work via an e-mail. The data sample will not be wide as the perception that quality of the sample response is highly regarded in the questionnaire. The questionnaire was done in a way that only a skilled investor professional due to the level of required information.
The results came inspiring as two out of the eight criteria been rated as the same importance during different market conditions. Also, six out of eight criteria failed to succeed and were volatile through different market conditions. Explained that 2 criteria could be dependent and work well during the long-term approach of investing and six
failed to be persistence and help in the long-term. Furthermore, six out of eight criteria showed it works in short-term market specific condition. The recommendation came from the four sources questionnaire result, Questionnaire rater feedback, industry leaders, and personal experience. The combination of four sources concluded a rounded research touching different parties to provide proper criteria to help in selection of equity fund managers. In conclusion the available information through academia was limited and too specific which I tried to bring a full comprehensive research to help in understanding and investing in external funds in a more fundamental way.
Description
Keywords
equity fund managers, financial industry, United Arab Emirates (UAE), fund management, selection criteria, academic research