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Equity Fund Performance and Sector Diversification

Author

Listed:
  • Mihovil An?elinovi?

    (Faculty of Economics and Business, University of Zagreb)

  • Livija Valenti?

    (Faculty of Economics and Business, University of Zagreb)

  • Ana Pavkovi?

    (Faculty of Economics and Business, University of Zagreb)

Abstract

This paper examines the performance of equity funds relative to the diversification of their portfolios. The main objective of the research is to determine how the allocation of investment in individual sectors affects the yield of equity funds in the Republic of Croatia. Six equity funds which were selected, invested more than 50% of their assets in sectors in the Republic of Croatia. An unbalanced dynamic panel model is estimated for the period from January 2012 to August 2017. Investing in tourism and industry has proved to be the most significant investment, and it has a positive effect on the fund yields, whereas significant negative impact has been discovered in consumer goods, funds and conglomerates, and the state sector. The macroeconomic environment was studied to put the conclusions of econometric analysis into the actual context. The conducted empirical analysis suggests that portfolio managers should pay more attention to macroeconomic conditions and trends in economic sectors if they want to achieve higher returns.

Suggested Citation

  • Mihovil An?elinovi? & Livija Valenti? & Ana Pavkovi?, 2020. "Equity Fund Performance and Sector Diversification," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 9(1), pages 25-43, June.
    • Handle: RePEc:sek:jijoes:v:9:y:2020:i:1:p:25-43
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    References listed on IDEAS

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    Cited by:

    1. KADEŘÁBKOVÁ Božena & BEDNÁŘ Ondřej, 2022. "How Much Can the Monetary Policies of Small Open Economies Neighbouring the Eurozone Be Independent?," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 02, June.
    2. KRULICKÝ Tomáš & FILHO Eduardo Aguiar Henrique & HROMADA Eduard & ČERMÁKOVÁ Klára, 2022. "The Effects of Homeownership on Wealth Distribution," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.

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    More about this item

    Keywords

    asset liability management; equity funds; sector diversification; panel data model; Croatia;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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