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Poor performance of mutual funds in Spain. 1991-2007

Author

Listed:
  • Fernandez, Pablo

    (IESE Business School)

  • Bermejo, Vicente J.

    (IESE Business School)

  • Bilan, Andrada

    (IESE Business School)

Abstract

Over the past 10 and 16 years, the average return on mutual funds in Spain was lower than the average return on government bonds at any term. Over the past 10 years, the average return on the funds was lower than inflation. In spite of these results, on December 31, 2007, 8,264,240 investors held 238.7 billion euros in the 2,907 mutual funds then in existence. During 2007, the number of shareholders fell by 555,569 and the value of their assets, by 6.1%. Only 30 of the 935 mutual funds with a 10-year history outperformed the benchmark and only two of them outperformed the overall index of the Madrid Stock Exchange (ITBM). If in the past 16 years every mutual fund had achieved the benchmark return for its category, the gain in value would have been 180 billion euros, instead of the actual figure of 80 billion euros. Total fees and other expenses for the period amounted to 34 billion euros.

Suggested Citation

  • Fernandez, Pablo & Bermejo, Vicente J. & Bilan, Andrada, 2008. "Poor performance of mutual funds in Spain. 1991-2007," IESE Research Papers D/746, IESE Business School.
  • Handle: RePEc:ebg:iesewp:d-0746
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    File URL: http://www.iese.edu/research/pdfs/DI-0746-E.pdf
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    Cited by:

    1. Billah, Mabruk & Amar, Amine Ben & Balli, Faruk, 2023. "The extreme return connectedness between Sukuk and green bonds and their determinants and consequences for investors," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    2. Bialkowski, Jedrzej & Otten, Roger, 2011. "Emerging market mutual fund performance: Evidence for Poland," The North American Journal of Economics and Finance, Elsevier, vol. 22(2), pages 118-130, August.
    3. Del Giudice, Alfonso & Paltrinieri, Andrea, 2017. "The impact of the Arab Spring and the Ebola outbreak on African equity mutual fund investor decisions," Research in International Business and Finance, Elsevier, vol. 41(C), pages 600-612.

    More about this item

    Keywords

    mutual funds; return to shareholders; benchmark; appreciation of the funds:;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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