--%>

Explain few Spanish mutual funds outperform their benchmark

Is this true that very little Spanish mutual funds outperform their benchmark? Isn’t this strange?

E

Expert

Verified

Yes. Throughout the period 1998 to 2007, only 30 of the 935 mutual funds along with over 10 years of history acquired a higher return than the benchmark used; and only two of them acquired a higher return than the Overall Index of the Madrid Stock Exchange.

In 1998 to 2007 and 1992 to 2007, the average returns on mutual funds were lower than the returns on state bonds at any term seem. Throughout the past 10 years, the average return of the funds was lower than inflation. In spite of these results, on 31st December 2007, 8,264,240 shareholders had €238.7 billion invested into the 2,907 existing investment funds.

   Related Questions in Corporate Finance

  • Q : Problem on financial manager

    Assume that you are a financial manager of Yuen Cheong Manufacturng Company. Due to the rising demand of product X, Yuen Cheong Manufacturng Company decides to open a new production plant in China, so it needs to take a loan of US$1 million. Bank A offers Yuen Cheong

  • Q : PV of Dividends PV of dividends:

    PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its dividend to grow at 7 percent for the next four years. What is the present value of dividends over the next five-year period if the required rate of return is 10 percent?

  • Q : In which cases use different WACCs Is

    Is this possible to use different WACCs within order to discount each year’s flows? In which cases?

  • Q : Problem on EBIT ABC Corporation stock

    ABC Corporation stock sells at $27 per share and its dividend per share is $1.20. ABC has price-earnings ratio of 16. The company contains $40 million worth of bonds, selling at par, with 8.5% coupon. The EBIT of ABC is of $12 million and its tax rate is 30%. Calculat

  • Q : Explain the result of volatility

    Explain the result of volatility structure.

  • Q : Additive risk in the CAPM Suppose that

    Suppose that the two securities APPL and MSFT account for the entire large cap technology component of the S&P 500 (hypothetically – of course – there are really plenty of others). Further, suppose that their weights in the S&P index were as follow

  • Q : What are flow variables Flow variables

    Flow variables: Any variable, whose magnitude is evaluated over a time period, is termed as glow variable.

  • Q : Problem on Bank branch networks While

    While banks across the United States and Europe are cutting down their number of branches, the number of bank branches in Hong Kong has increased in the same period. Hong Kong Monetary Authority statistics show the number of bank branches in Hong Kong at the end of 20

  • Q : Explain definition of put–call parity

    Explain the definition of put–call parity described by Reinach.

  • Q : Explain consensus among the chief

    Is there any consensus among the chief authors in finance concerning the market risk premium?