Efficiency and investment style of European mutual funds

Marta Vidal (), Laura Molero González (), Juan E. Trinidad-Segovia () and Javier Vidal-García ()
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Marta Vidal: Universidad Europea de Madrid
Laura Molero González: University of Almería
Juan E. Trinidad-Segovia: University of Almería
Javier Vidal-García: Complutense University of Madrid

Economics Bulletin, 2025, vol. 45, issue 1, 623 - 637

Abstract: In this paper, we use Data Envelopment Analysis (DEA) to examine the efficiency of European mutual funds across different investment styles. The DEA methodology goes beyond conventional efficiency to identify the most efficient mutual funds compared to the rest of the sample. Due to its flexibility including inputs and outputs (without a previously established relationship) and the lack of need for a hypothesis about the production function, the DEA allows for building efficient frontiers using the information collected from each fund. The application of the DEA in the sample of European mutual funds has served to show potential investors its usefulness and effectiveness in terms of fund selection. The results obtained in this study allow the identification of mutual funds with the most significant profitability potential and those with lower expectations of profitability.

Keywords: Mutual Funds; Efficiency; Factor Models; Data Envelopment Analysis. (search for similar items in EconPapers)
JEL-codes: G1 G2 (search for similar items in EconPapers)
Date: 2025-03-30
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