Evaluation of the Performance of Mutual Stock Fund Strategies Using the Entropy-Based Topsis Method

Ä°stemi Çã–mlekã‡ä°

Fiscaoeconomia, 2024, issue 3

Abstract: Investors always need to answer the question of which financial assets should be invested. The question that investors who have the opportunity to create a portfolio by spending less time with investment funds managed by professionals has become which fund should be preferred. For this reason, fund return, risk level, fund performance, and persistence of fund performance have become important issues.In this study, it is aimed to determine the factors affecting the selection of mutual funds and to determine the fund’s performances according to the fund strategy. The data set of the research consists of data between January 2019 and December 2023 of 55 mutual funds traded in TEFAS, which have data for the last five years. These 55 mutual funds are divided into eight different groups according to their investment strategies. Short-, medium-, and long-term returns, portfolio size, number of shares, and fund management fee were taken as factors affecting fund selection. The entropy method was used to determine the weights of the criteria affecting fund selection, and the Topsis method was used to rank the fund performances.According to the study results, the two most important criteria affecting fund selection are fund management fee and medium-term return. The funds with the highest fund performance are those that follow a sector strategy. Mutual sector funds were followed by participation mutual funds and funds that followed a diversification strategy. The fund groups with the lowest fund performance are funds investing in Bist 100, Bist 30, and subsidiary shares.

Keywords: Mutual Funds; Fund Performance; Entropy; Topsis (search for similar items in EconPapers)
JEL-codes: G11 M10 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:fis:journl:240304

DOI: 10.25295/fsecon.1470123

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