Do big data mutual funds outperform?

Junsheng Zhang, Zezhi Peng, Yamin Zeng and Haisheng Yang

Journal of International Financial Markets, Institutions and Money, 2023, vol. 88, issue C

Abstract: The study aims to empirically evaluate the effectiveness of big data in aiding investors with their decision-making. Our findings indicate that big data funds do not exhibit superior performance compared to their human-managed counterparts. The big data factor utilized in the investment strategies of big data funds does not enhance their stock-selection ability. Additionally, the performance of big data funds is not more persistent than that of traditional funds and is significantly influenced by fund managers’ skills, which shows that big data technology and AI algorithms can not replace fund managers in decisions. Overall, these findings suggest that, thus far, big data technology has not yielded significant improvements in fund performance.

Keywords: Big data; Mutual fund performance; Fund manager; Algorithmic trading (search for similar items in EconPapers)
JEL-codes: G11 G12 G23 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:88:y:2023:i:c:s1042443123001105

DOI: 10.1016/j.intfin.2023.101842

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