Average funds versus average dollars: Implications for mutual fund research

The top 5% of actively managed U.S. equity mutual funds in 2012 had greater aggregate TNA than the remaining 95% of funds combined. This skewness in size has implications for mutual fund research: What is true of the average fund is not necessarily true of the average dollar. We explore several key...

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Bibliographic Details
Published in:Journal of empirical finance 2014-09, Vol.28, p.249-260
Main Authors: Clifford, Christopher P., Jordan, Bradford D., Riley, Timothy B.
Format: Article
Language:English
Subjects:
Average
Dollar
Equity
Flow convexity
Investment trusts
Investors
Literature
Mutual funds
Smart money
U.S.A
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Summary:The top 5% of actively managed U.S. equity mutual funds in 2012 had greater aggregate TNA than the remaining 95% of funds combined. This skewness in size has implications for mutual fund research: What is true of the average fund is not necessarily true of the average dollar. We explore several key findings in the literature with an eye on this distinction. Our results indicate that if the goal of mutual fund research is to understand the importance of the industry to investors, then researchers should consider the experience of the average dollar, rather than the average fund.
ISSN:0927-5398
1879-1727
DOI:10.1016/j.jempfin.2014.07.005