Performance of U.S. Equity Mutual Funds and Strategies for Excess Corporate Cash.

• In Event: Public Interest

Abstract

This paper investigates the performance of US equity mutual funds. The primary benefit to understanding mutual funds is the potential to use them as a tool to manage excess corporate cash. Specifically, we examine the relationship among mutual fund expenses including 12b-1 fees, sales load at purchase, management fees, total capitalization, and performance. The sample consists of 96 actively managed mutual funds for the years 2010 to 2014. We find that 2b-1 fees, sales load at purchase, management fees, and total capitalization were not significant predictors of mutual fund performance. Further, in most years, actively managed mutual funds were not able to outpace the benchmark index. However, a small cluster of successful mutual funds (30) exceeded the performance of the S&P 500 by 5.99%. The results may prove valuable to firms as they consider investment strategies for excess cash.

Authors

• Shay Richardson, Walden University

• Roger William Mayer, State University of New York-Old Westbury

• Wen-Wen Chien, SUNY Old Westbury