Further Evidence on the Performance of Funds of Funds: The Case of Real Estate Mutual Funds
Kevin C.H. Chiang
University of Vermont
University of Oregon - Department of Finance
National Yunlin University of Science and Technology
Craig H. Wisen
affiliation not provided to SSRN
Real Estate Economics, Vol. 36, No. 1, pp. 47-61, Spring 2008
Funds of funds (FOFs) are created when investment companies invest in other investment companies. Although the additional layer of fees incurred by FOFs has a negative effect on returns, there is empirical evidence that real estate FOFs generate superior performance net of fees and risk adjustments. The evidence is inconsistent with a growing consensus that most actively managed mutual funds do not, on average, generate excess returns after adjusting for fees and risk. This study explains this apparent contradiction and finds that most real estate FOFs do not outperform their benchmarks under alternative risk adjustment specifications.
Number of Pages in PDF File: 15Accepted Paper Series
Date posted: February 2, 2008
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