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Title: | FUND PRICING IN SINGAPORE: FACTORS AND RELATIONSHIP WITH PERFORMANCE | Authors: | DENISE CHONG JUN LI | Issue Date: | 6-Apr-2020 | Citation: | DENISE CHONG JUN LI (2020-04-06). FUND PRICING IN SINGAPORE: FACTORS AND RELATIONSHIP WITH PERFORMANCE. ScholarBank@NUS Repository. | Abstract: | Over the years, mutual funds have become increasingly popular alternative instruments for investments and savings, as investors increasingly seek to diversify their portfolios. These include both active funds, which incur higher management fees in exchange for attempts to generate alpha on a risk-adjusted basis, as well as passive funds, whose primary objective is to match benchmark performance. Due to the significant fund expenses and ongoing charges incurred by active fund managers, there have been numerous debates surrounding the value of investing in these funds, whose returns do not necessarily outperform market indices after accounting for fees. This paper thus seeks to examine the price-performance relationship, along with potential influencing factors, of mutual funds issued in Singapore across four primary categories, namely Equity, Bond, Exchange-Traded Funds (ETFs), and Mixed Assets. Our findings reveal that higher fund expenses have a significantly negative impact on fund returns, regardless of the regression model, for Equity and Bond funds. In contrast, the direction of this price-performance relationship is less well-defined for ETFs and Mixed funds. Furthermore, in order to better understand the influence of fund expenses on performance, we identified other key factors - namely fund age, fund share class, as well as fund size - that influence the direction and strength of this relationship, to varying extents. Nonetheless, despite the erosion of fund returns by expenses incurred, the positive regression constants produced, for all fund categories except Mixed, do suggest that active fund management can be of value to investors' portfolios, as long as the fees incurred are not disproportionate. | URI: | https://scholarbank.nus.edu.sg/handle/10635/171613 |
Appears in Collections: | Bachelor's Theses |
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DENISE CHONG JUN LI_A0140903R_BHD4001.pdf | 778.52 kB | Adobe PDF | RESTRICTED | None | Log In |
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