Funds Flow and Performance of Managed Funds in Pakistan

Archives of Business Research – Vol.5, No.7, 2014

21 Pages Posted: 15 Oct 2017

See all articles by Sumra Latif Mughal

Sumra Latif Mughal

Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST), Students; Bahria University, Students

Muhammad Mubeen

IQRA University

Muhammad Hanif

State Bank of Pakistan

Date Written: July 1, 2014

Abstract

The main purpose of this study is to examine the mutual fund industry of Pakistan, to examine the assets allocation pattern of mutual funds, how efficiently they are allocated into various assets categories and how investors base their future investment decisions either on past performance or on the basis of risk, size of fund, and availability of alternative investments. On the basis of results it is noted that on average small and medium investors prefer investments in less risky assets and base their future investment decisions on the basis of past performance whereas big corporate investors calculate risk and make their investment decisions after complete analysis. This study uses panel regression model to test the relationship between past performance and excess returns. The results indicate that fund managers use past performance of a fund as marketing tool to attract investors to invest in a fund which are performing well in recent past. These findings are of immense importance for policy makers as well, to formulate policies which are beneficial for investors and do not allow fund managers to get advantage from investors.

Keywords: Mutual Funds, Investment, Past Performance, Panel Econometric, Balanced Data

Suggested Citation

Mughal, Sumra Latif and Mubeen, Muhammad and Hanif, Muhammad, Funds Flow and Performance of Managed Funds in Pakistan (July 1, 2014). Archives of Business Research – Vol.5, No.7, 2014, Available at SSRN: https://ssrn.com/abstract=3005833

Sumra Latif Mughal

Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST), Students ( email )

Karachi
Pakistan
923333212120 (Phone)

Bahria University, Students ( email )

Pakistan

Muhammad Mubeen (Contact Author)

IQRA University ( email )

Defence View
Shaheed-e-Millat Road (Ext.)
Karachi, Sindh 75500
Pakistan

Muhammad Hanif

State Bank of Pakistan

I.I. Chundrigar Road
KARACHI, Sindh 74000
Pakistan

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