The Impact of UCITS IV Directive on European Mutual Funds Performance

41 Pages Posted: 21 Aug 2015

See all articles by Khim Veasna

Khim Veasna

University of Lorraine - CEREFIGE Research Center

Hery Razafitombo

University of Lorraine - CEREFIGE Research Center

Date Written: August 20, 2015

Abstract

In this paper we examine the impact of UCITS IV Directive on the performance of European mutual funds. In a sample of 1435 Equity funds from December 2001 to December 2013, we empirically investigate the effects of economies of scale on the relation between size and performance. Using Chen et al. (2004) portfolio approach with various benchmark factors models, we find significant performance improvements according to UCITS IV periods. Using panel regressions with multilevel models, we find that European funds seem to benefit from gains related to size and not face to diseconomies of scale. Nonetheless, some specific characteristics of European fund family structure burden performance. Despite the intention from regulators to provide costless and favorable environment, European fund families are highly diversified and constituted by large number of low-sized members to achieve overall positive spillover effects.

Keywords: Performance evaluation, European funds, Economy of scale, UCITS IV

JEL Classification: G11, G23

Suggested Citation

Veasna, Khim and Razafitombo, Hery, The Impact of UCITS IV Directive on European Mutual Funds Performance (August 20, 2015). 28th Australasian Finance and Banking Conference, Available at SSRN: https://ssrn.com/abstract=2648173 or http://dx.doi.org/10.2139/ssrn.2648173

Khim Veasna

University of Lorraine - CEREFIGE Research Center ( email )

13 rue Michel Ney
Nancy, 54000
France

Hery Razafitombo (Contact Author)

University of Lorraine - CEREFIGE Research Center ( email )

13 rue Michel Ney
Nancy, 54000
France

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