MFDF - Mutual Fund Directors Forum - Academic Finds Small Funds Face Grinding Path to Achieve Performance test

Member Login

Request an account

Sample Banner 1

Academic Finds Small Funds Face Grinding Path to Achieve Performance

An academic from George Mason University writes in the Wall Street Journal that a large fund is likelier to perform better than a small fund on several counts. Professor Derek Horstmyer studied a range of actively managed funds over a five-year period and found that smaller funds had lower returns after taxes and a greater range of returns in the five-year period ending March 2019. Among several roadblocks smaller funds faced were increased tax consequences due to higher portfolio turnover. Overall, Horstmeyer found that “small-fund managers investing in domestic equity underperformed large-fund managers by 1.54 percentage points a year over the past five years.” The underperformance applied to both international equity and fixed income small funds.

  • All
  • Accounting and Audit
  • Advisory Contracts
  • Board Governance
  • Board Governance: Board Leadership
  • Board Governance: Compensation
  • Board Governance: Oversight of CCO
  • Board Governance: D&O Insurance
  • Board Governance: Self-Evaluation
  • Closed-end Funds
  • ETFs
  • Other Oversight
  • Other Oversight: Alternative Investments and Derivatives
  • Other Oversight: Custody
  • Other Oversight: Fixed Income funds
  • Other Oversight: Distribution
  • Other Oversight: Portfolio Trading
  • Other Oversight: Proxy Voting
  • Other Oversight: Securities Lending
  • Legislative News
  • Money Market Funds
  • Reference
  • Regulatory News
  • Risk
  • Shareholder Disclosure
  • Valuation
  • Webinars
  • Aaron New Tag