A study of passive vs. active strategy in asset management of mutual funds: panel data of Puerto Rico and the USA, 1987-2018
by Bethzaida Lebrón; Ahmad H. Juma'h
International Journal of Accounting and Finance (IJAF), Vol. 11, No. 2, 2022

Abstract: Asset management is a matter of identifying desirable investments that require optimally structuring the assets within the portfolio. This study compares Puerto Rico mutual funds, passively managed, with actively managed USA mutual funds. We collected data from 48 PR-based mutual funds companies and 127 USA-based mutual funds companies from 1987 to 2018. Test of equality and multivariate regression showed underperformance of PR mutual funds compared to the USA mutual funds. The results of Puerto Rico's mutual funds indicated that strategy, closed mutual funds, and size do not significantly affect performance. But age had a significantly positive effect on financial performance. For further studies, we suggest examining the effect of diversification on passively managed Puerto Rico mutual funds' performance.

Online publication date: Tue, 13-Jun-2023

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