Appraising the Effect of Internal and External Organization Factors on Investment Mutual Funds' Return In Iran

Subject Areas : International Journal of Finance, Accounting and Economics Studies

Received: 2010-10-17 Accepted : 2010-12-03 Published : 2011-01-20

Keywords: Investment Mutual Fund, Open End Mutual Fund, net asset&#x0D, &#x0D, value, Funds Return,

Abstract :

One of the main functionalities of capital market is to improve liquidityin the market which provides security for the investors. Mutual funds aremodern financial institutions which are designed with the aim of collectingfunds from investors and devote them to buy a variety of securities inorder to mitigate investment risks, exploit the economies of scale andfinally create a reasonable return for investors. Regarding effective role ofthese funds, the goal of this research is presenting a model to review themain and important factors of internal and external organizationalvariables on funds return. In order to scrutinize the effect of variables ofresearch on funds' return, the Fama-MacBeth multilateral regressionmodel was exerted. We gathered data from 13 authorized mutual fundsduring a 65 week period or 16 months. Results denote that there is ameaningful and positive correlation between, internal organization factorsof funds’ ex-fluctuations of returns, funds’ last periods’ return, and alsoexternal organization factors of funds’ age, funds’ assets turnover rateand the funds’ acquired return. The evidences also imply that there isn’tany positive and meaningful correlation between internal organizationfactor of assets’ under funds managers’ control, and external organizationfactor rate of injection of new money to funds and the funds’ acquiredreturn.