The Determinants of mutual fund performance: a cross-country study

Miguel A. Ferreira; Aneel Keswani; António F. Miguel; Sofia B. Ramos

doi:10.1093/rof/rfs013

The Determinants of mutual fund performance: a cross-country study

Miguel A. Ferreira, Aneel Keswani, António F. Miguel, Sofia B. Ramos

NOVA School of Business and Economics (NOVA SBE)

Research output: Contribution to journal › Article › peer-review

196 Citations (Scopus)

Abstract

We use a new data set to study the determinants of the performance of open-end actively managed equity mutual funds in 27 countries. We find that mutual funds underperform the market overall. The results show important differences in the determinants of fund performance in the USA and elsewhere in the world. The US evidence of diminishing returns to scale is not a universal truth as the performance of funds located outside the USA and funds that invest overseas is not negatively affected by scale. Our findings suggest that the adverse scale effects in the USA are related to liquidity constraints faced by funds that, by virtue of their style, have to invest in small and domestic stocks. Country characteristics also explain fund performance. Funds located in countries with liquid stock markets and strong legal institutions display better performance.

Original language	English
Pages (from-to)	483-525
Number of pages	43
Journal	Review Of Finance
Volume	17
Issue number	2
DOIs	https://doi.org/10.1093/rof/rfs013
Publication status	Published - 1 Apr 2013

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The Determinants of mutual fund performance: a cross-country study

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