Equity Fund Performance and Sector Diversification

Mihovil An?elinovi? (), Ana Pavkovi? () and Livija Valenti? ()
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Mihovil An?elinovi?: Faculty of Economics and Business, University of Zagreb
Ana Pavkovi?: Faculty of Economics and Business, University of Zagreb
Livija Valenti?: Faculty of Economics and Business, University of Zagreb

No 6710018, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: This paper examines the performance of equity funds relative to the diversification of their portfolios. The main objective of the research is to determine how the allocation of investment in individual sectors affects the yield of equity funds in the Republic of Croatia. Six equity funds which were selected, invested more than 50% of their assets in sectors in the Republic of Croatia. An unbalanced dynamic panel model is estimated for the period from January 2012 to August 2017. Investing in tourism and industry has proved to be the most significant investment and it has a positive effect on the fund yields, whereas significant negative impact has been discovered in consumer goods, funds and conglomerates and the state sector. The macroeconomic environment was studied in order to put the conclusions of econometric analysis into the actual context. The conducted empirical analysis suggests that portfolio managers should pay more attention to macroeconomic conditions and trends in economic sectors if they want to achieve higher returns.

Keywords: asset liability management; equity funds; sector diversification; panel data model; Croatia (search for similar items in EconPapers)
JEL-codes: C33 G11 G23 (search for similar items in EconPapers)
Pages: 1 page
Date: 2018-10
New Economics Papers: this item is included in nep-fmk and nep-tra
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Published in Proceedings of the Proceedings of the 41st International Academic Conference, Venice, Oct 2018, pages 6-6

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iacpro:6710018

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