Size and performance of Chinese mutual funds: The role of economy of scale and liquidity

Ke Tang, Wenjun Wang and Rong Xu ()

Pacific-Basin Finance Journal, 2012, vol. 20, issue 2, 228-246

Abstract: Using a detailed stockholding for a comprehensive sample of Chinese open-end equity mutual funds from 2004 to the first half of 2010, we investigated the effect of economy of scale and liquidity on the relationship between fund size and performance. We find that an inverted U-shape relationship exists between fund size and performance as measured by various performance benchmarks. Both economy of scale and liquidity play important roles in Chinese mutual funds. Furthermore, their combined effect explains the inverted U-shape relationship of size and performance reasonably well.

Keywords: Chinese mutual funds; Size; Performance; Economy of scale; Liquidity (search for similar items in EconPapers)
JEL-codes: G23 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (29)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:20:y:2012:i:2:p:228-246

DOI: 10.1016/j.pacfin.2011.09.002

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