Distinctive Strategies in the Equity Mutual Funds Industry

Student thesis: Doc typesDoctor of Economics and Business Management

Abstract

Over the last 50 years, active portfolio management has been at the heart of the academic debate in finance. Are some managers truly skilled and able to create net value for their investors? If so, can they do it persistently? These questions have fostered an incredible diversity of researches prior to the 2000’s which formed the current consensus stating that skilled managers are unable to generate value in excess of costs persistently. Yet, in the last two decades, the asset management industry has witnessed drastic changes casting doubts on the conclusions drawn by seminal studies. Indeed, the industry grew massively on a worldwide scale and has seen the rise of new types of funds (e.g. socially responsible funds, exchange traded funds) and new types of strategies blurring the frontier between active and passive management (e.g. smart beta). Those changes increased the market competitive pressure and reignited the debate on active management. This thesis aims to contribute to the literature by investigating how investors could distinguish skilled managers. Focusing mainly on the European market –mostly overlooked by the literature– we propose to evaluate active managers along their strategy distinctiveness, their level of portfolio concentration, as well as the size of their investment universe in order to understand whether they could generate benefits for their clients.
Date of Award2 Sep 2020
Original languageEnglish
Awarding Institution
  • University of Namur
SponsorsBNP Paribas & Université de Namur
SupervisorJean-Yves Gnabo (Supervisor), OSCAR BERNAL DIAZ (Supervisor), Stephane Faulkner (President), Sophie Bereau (Jury), Mikael PETITJEAN (Jury), Christophe M. Boucher (Jury) & Alexandre Girard (Jury)

Keywords

  • Mutual funds
  • ESG
  • Performance
  • Portfolio concentration
  • strategy distinctiveness

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