Mutual fund ownership and sponsor background: effect on performance and risk strategy

Inderjit Kaur and K.P. Kaushik

International Journal of Management Practice, 2016, vol. 9, issue 3, 282-301

Abstract: The study aims to analyse whether performance of mutual fund could be attributed to differential in information access and organisation culture which we propose could exist due to ownership pattern and background of sponsor. By utilising the data on Indian equity mutual funds with growth objective for the period 2005-2013, we have compared performance and risk strategy of mutual funds having different ownership and sponsor background by applying portfolio approach and regression method. The results provided that performance and risk strategy have been significantly different among mutual funds with different type of ownership and sponsor background. In particular foreign-owned mutual funds performed significantly better than domestic mutual funds. The foreign mutual funds have not been mere naive traders in Indian stock market. The findings do not support information bias theory in the context of Indian stock market and better performance of foreign funds could be due to cultural differences based on ownership and sponsor background.

Keywords: mutual funds; mutual fund ownership; sponsor background; fund performance; risk strategy; information access; organisation culture; ownership patterns; foreign ownership; domestic ownership; India; stock markets; cultural differences. (search for similar items in EconPapers)
Date: 2016
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