Antecedents of Equity Fund Performance: A Contingency Perspective

Li Xian Liu, Fuming Jiang (), Jizhong Li () and Omar Al Farooque ()
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Li Xian Liu: College of Business, Law and Governance, James Cook University, 1 James Cook Dr, Douglas, QLD 4811, Australia
Fuming Jiang: School of Management, Curtin University, Kent Street, Bentley, WA 6102, Australia
Jizhong Li: School of Management, Curtin University, Kent Street, Bentley, WA 6102, Australia
Omar Al Farooque: UNE Business School, University of New England, 17a Union Road, Armidale, NSW 2351, Australia

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2021, vol. 24, issue 01, 1-40

Abstract: While the fund performance management literature has clearly documented that the fund size, fund family size, and net cash flow are important antecedents of equity fund performance, prior empirical studies have revealed mixed results that have not been adequately explained. Through the lens of the contingency perspective, we developed a conceptual model that examines how the expense ratio and management compensation as contextual factors interact with the fund size, fund family size, and net cash flow to affect equity fund performance. The empirical analyses were based on panel data including 690 equity funds in China over a 7-year period from 2009 to 2015. The results show that the expense ratio and management compensation moderate the effects of the fund family size and net cash flow on fund performance, and management compensation also moderates the relationship between the fund size and fund performance.

Keywords: Fund size; fund family size; net cash flow; expense ratio; management compensation; equity fund performance; contingency perspective (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1142/S0219091521500065

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