RETURNS TO MUTUAL FUND INVESTORS A STUDY OF CANADIAN MUTUAL FUND

Abstract

Using a comprehensive sample of Canadian open end equity mutual funds and investors our results show that the lackluster performance in comparison to some well recognized bench marks like the TSE 300 and the 90 day T-Bill rates, is even lower when one accounts for the timing of entry and exit by mutual fund investors. Two possible explanations for this are the lack of performance persistence and the tendency among investors to chase winners and reluctance to exit from loosing funds.