mutual funds - introduction

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MUTUAL FUNDS MANAGEMENT


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Introduction

Aminah, S. and Zahariah, S. (2015), The Performance of Unit

Trust Industry in a!aysia, Information ana"ement and

#usiness $e%ie&. 'o!. , o. *, +a"e *-5*. (ISS 2220-/) Aminah Shari, . A. (2015). om+arati%e Ana!ysis of i3ed

Income Unit Trust unds %ersus 4uity Unit Trust unds in

a!aysia. Proceedin"s of the 2015 The 1th a!aysian

inance Association onference. 6ota 6ina7a!u, 2-* 8une

2015.

Aminah, S. and Siti ur Ai!ah, A.#. (2015), Performance of

#ond Unit Trust unds in a!aysia, 9!o7a! 4conomics and

inance 8ourna!. (Acce+ted and to 7e +u7!ished in 201

u+comin" +u7!ication )


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Information Management and Business Review ISSN !!!"#$%&'(

)o*+ %, No+ -, ..+ -'#/-, August !"0/

T1e 2erformance of Unit Trust Industr3 in Ma*a3sia

Amina1 S1ari, 4a1aria1 Sa1udin

Abstract: This study measured the efficiency of fixed income unit trust funds

and equity unit trust funds for the period of January 2004 to December 2014.

A total of 3 fixed income funds and 10! equity funds "ere e#aluated usin$stochastic frontier analysis %&'A( technique "ith three inputs %expense ratio)

portfolio turno#er ratio) and fund mana$ement stated fee( and one output

#ariable %return(. The econometric technique "as used to measure the

portfolio efficiency score as "ell as to compare the efficiency of fixed income

funds and equity funds. The results indicated that the a#era$e efficiency score

for equity unit trust funds "as hi$her than fixed income unit trust funds.*e#ertheless) "hen the samples "ere cate$ori+ed into panel data) the a#era$e

efficiency score for fixed income funds increased throu$hout ten years.

,ean"hile the a#era$e score for equity funds "as consistent o#er the years. -t

sho"s that time is in#ariant for equity funds. o"e#er) this means that the

performance efficiency for both types of funds "as considered excellent and

efficient. The results indicate that the mean efficiency achie#ed in unit trustindustry is almost 100/ of its potential output.


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2roceedings of t1e !"0/ T1e 0%t1 Ma*a3sian Finance Association 5onference5om.arative Ana*3sis of Fi6ed Income Unit Trust Funds versus E7uit3

Unit Trust Funds in Ma*a3sia

8Amina1 S1ari

2rof+ Dr+ Nur Adiana 9iau A:du**a1

This study examines the performance of fixed income unit trust funds and equity

unit trust funds for the period of January 200 to ctober 2012. A total of 31

fixed income funds and o#erall equity funds "hich are made up of 3 $ro"th

equity and 20 #alue equity are e#aluated by usin$ three performance measuresnamely Treynor ratio) &harpe ratio and Jensen ratio. The results indicate that the

mean returns of equity funds are hi$her than the fixed income funds and the

maret benchmar represented by the 56-. -t is also found that there is a

si$nificant difference in the performance of equity funds as compared to fixed

income funds for the &harpe and Treynor measures. o"e#er) the Jensen ratio

produces insi$nificant results. 7hen the equity funds are cate$ori+ed into$ro"th and #alue funds) results sho" that there is a si$nificant difference in the

performance of $ro"th funds and fixed income funds based on the &harpe and

Jensen ratios8 but for #alue funds) all performance measures produce a

si$nificant result indicatin$ that performance of fixed income funds #aries from

that of #alue funds.


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2erformance of Bond Unit Trust Funds in Ma*a3sia, G*o:a* Economics and

Finance ;ourna* Acce.ted and to :e .u:*is1ed in !"0' u.coming .u:*ication (

Amina1 s1ari

Siti Nur A7i*a1 A:+


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Definition = mutua* funds

,utual 'unds %9nit Trusts in ,alaysia(are in#estment #ehicles by poolin$

monies from #arious in#estors then

"ill be in#ested and mana$e properlyby a fund mana$er.


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Structure of mutua* funds

-n#estment ad#isor buys and sells stocs or bonds and o#erseesthe in#estment portfolio

Distributor sells the fund shares Direct to the public Throu$h broers

Trustee : 6ustodian physically safe$uards the securities

-n#estors or unit olders ; The pro#iders of funds) "ouldexpects to recei#e benefits from the in#estment

,ana$ement company runs the funds< daily operations

Transfer a$ent eeps trac of purchases and redemption requestsfrom shareholders


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MUTUAL FUND >U?TATI?NS

mutual funds - introduction

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