This study attempts to conduct a five-year performance assessment by analyzing all 24 closed-end mutual funds that had been trading at Dhaka Stock Exchange from December 2011 to January 2017. While analyzing the risk-return profile, the research incorporated both market price and net asset value (NAV) of the mutual funds.NAV depends on the price of securities included in a fund's portfolio whereas, the market price is determined by demand and supply forces. Thus, the market price of a fund is not always equal to its NAV. The study uses market price as a basis for analyzing the risk-return profile of the funds for evaluating the performance of the funds in the market. With the purpose of assessing the performance of asset managers, the study uses NAV as a basis for computing Jensen's α and M squared measure. While assessing performance the study focuses on Jensen's α and M squared measure as other measures like Sharpe and Treynor do not work with negative numerators and do not provide information on whether the mutual fund outperformed the market portfolio. Both Jensen's α and M squared measure can independently describe whether a fund beat the market or not. A positive value of Jensen's α and M squared measure indicates that the fund outperformed the market considering respectively β and σ as a measure of risk. SEBL1STMF, POPULAR1MF, and IFILISLMF1 were among top four funds considering both M2 and Jensen's alpha measures based on both market price and NAV. The M2 measure, a coefficient of variation, Sharpe ratio, and Treynor ranked SEBL1STMF as the best performer in the market. This fund also topped while assessing performance by M2 measure on the basis of NAV. On the basis of market price and NAV, 21 funds and 22 funds could produce positive M2 respectively.
Based on secondary data, the study is intended to draw the scenario of RMG industry in
Abstract:After the cruel crash in 1996 Bangladesh stock market had started growing from 2006 due to listing of a few profitable government entities and Multinational Companies (MNCs). Together with individual investors nearly all commercial banks involved themselves intensely in stock market.Step by step, the bullish market transformed into a bubble and on December 05, 2010, the Dhaka Stock Exchange General Index (DGEN) reached at the record high of 8918.5, almost 5.6 times higher than December 2006. Concurrently, market capitalization and turnover increased by 11.1 times and 61.7 times respectively. However, when the bubble burst on December 19, 2010 the DGEN witnessed its biggest one day fall of 6.7 percent and since then the market has become bearish with almost no positive movement of stock prices. Against this backdrop, this study identified four moneymaking psychologies of domestic investors specifically greed, envy, speculation, and overconfidence that contributed to the formation of bubble, while four loss-minimizing and capital-protecting psychologies such as panic, frustration, lack of self-confidence, and distrust caused the bubble to burst. The bankers, brokers and manipulators were the biggest gainers, whereas the most unaware and greedy small investors encountered heavy loss. The market will be less volatile, more mature, and sustainable when most of the investors will be conscious about the potential risks and returns and the regulators will play their part sincerely and efficiently.
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