Assessing Energy Mutual Funds: Performance, Risks, and Managerial Skills

Davinder Malhotra () and Srinivas Nippani
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Davinder Malhotra: School of Business, Thomas Jefferson University, Philadelphia, PA 19107, USA
Srinivas Nippani: College of Business, Texas A&M University-Commerce, Commerce, TX 75429, USA

IJFS, 2024, vol. 12, issue 1, 1-18

Abstract: This study investigates the risk-adjusted performance of energy equity mutual funds across a 23-year period, employing the Cumulative Wealth Index (CWI) to gauge their long-term performance relative to benchmark indices. Despite inherent volatility due to the energy sector’s cyclical nature, these funds consistently outperformed benchmarks based on monthly returns, showcasing resilience amid market fluctuations. However, challenges emerged during the COVID-19 pandemic, with notable improvements post-vaccination. Utilizing a multi-factor model, the research highlights the interconnectivity of energy equity mutual funds with broader market movements and systemic factors. Despite their primary focus on the energy sector, these funds exhibit sensitivity to larger market trends, rendering them susceptible to market dynamics. Additionally, an assessment of portfolio manager expertise reveals some proficiency in security selection post-vaccinations against COVID-19.

Keywords: energy; mutual funds; risk-adjusted performance; Sharpe ratio; Carhart four-factor model; COVID-19 (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2024
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