Prospecting for Alpha: Equity Fund Performance, Flows and the Mining Boom in Australia

32 Pages Posted: 15 Feb 2014

See all articles by Andrew Ainsworth

Andrew Ainsworth

University of Wollongong - School of Accounting, Economics & Finance

Adam James Corbett

The University of Sydney - Discipline of Finance; Financial Research Network (FIRN)

Date Written: January 16, 2014

Abstract

Industry performance is a key component of the top-down approach to investment management. The recent boom in the stock prices of mining companies in Australia affords an opportunity to examine whether equity funds are able to capture industry outperformance. Funds with a higher exposure to the mining industry do not earn higher returns, yet they are able to attract increased flows from investors. The positive impact of mining exposure on fund flow is consistent with investors being attracted to ‘hot’ investment styles and misinterpreting industry allocation as fund skill.

Keywords: Managed equity funds, Australian mining boom, Fund flows, Performance

JEL Classification: G11, G23

Suggested Citation

Ainsworth, Andrew and Corbett, Adam James, Prospecting for Alpha: Equity Fund Performance, Flows and the Mining Boom in Australia (January 16, 2014). Available at SSRN: https://ssrn.com/abstract=2395519 or http://dx.doi.org/10.2139/ssrn.2395519

Andrew Ainsworth (Contact Author)

University of Wollongong - School of Accounting, Economics & Finance ( email )

Northfields Avenue
Wollongong, NSW 2522
Australia

Adam James Corbett

The University of Sydney - Discipline of Finance ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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