Human Capital efficiency and equity funds’ performance during the COVID-19 pandemic

Abstract

The paper investigates the impact of human capital efficiency (HCE) on equity funds' performance during three stages of the COVID-19 pandemic. We collected data for 799 open-ended equity funds across five countries and ranked them in five categories of HCE and compare their risk-adjusted performance across these categories. The results suggest that during the COVID-19 outbreak, the equity funds that were ranked higher in HCE outperformed their counterparts. We suggest that fund managers should invest in human capital to improve funds’ coping ability and resilience during periods of extreme stress.

COVID-19, government policy responses, and stock market liquidity around the world: A note

“…A careful scrutiny of the literature suggests that COVID-19 effects have been investigated on several close, yet distinct financial market variables. These studies focus on equity markets ( Al-Awadhi et al, 2020 ; Goodell, 2020 ; Li et al, 2020 ; Pavlyshenko, 2020 ; Sharif et al, 2020 ; Topcu and Gulal, 2020 ), commodities such as oil and gold, and alternative assets, such as cryptocurrencies ( Bakas and Triantafyllou, 2020 ; Corbet et al, 2020; Umar et al, 2020 , Umar and Gubareva, 2020 ), the debt market ( Arellano et al, 2020 ; Qiang et al, 2020 ; Sène et al, 2020 ) and mutual funds ( Mirza et al, 2020 ; Yarovaya et al, 2020 ).…”

The impact of human capital efficiency on Latin American mutual funds during Covid-19 outbreak

“…Surprisingly, the evidence on the relationship between funds' performance and human capital efficiency is scant. As suggested by Yarovaya, Mirza, Abaidi, and Hasnaoui (2020), in a rational setting, the funds with higher HCE should have superior performance to their counterparts. The issue is even more critical in the context of the Covid-19 outbreak when the global economic systems are in a rout, and portfolio managers are facing extreme performance pressures.…”

Multidimensional effect of covid-19 on the economy: evidence from survey data

“…Also, these studies showed that the income of the households had been deteriorated due to the COVID-19 pandemic and the lockdown environment, and the unemployment and poverty ratio, budget deficit, and government expenditure has been increased while the GDP growth declined (Kansiime et al, 2021;Monitor, 2020;Nicola et al, 2020;Sumner et al, 2020;UN-Habitat & WFP, 2020;WorldBank, 2020). Still, the adverse effect of COVID-19 grows and negatively influence the financial sector, such as asset management (Rizvi et al, 2020), price reaction and funds performance , corporate solvency , and human capital efficiency impact on equity funds performance and mutual funds Yarovaya et al, 2021). As a matter of fact, these studies solely explain the negative impact of COVID-19 over these different sectors.…”

“…Human capital is also one of the focused research areas for scholars in this pandemic period. In this concern, Yarovaya et al (2021) and examined human capital efficiency on equity funds performance and mutual funds during the COVID-19 for EU and Latin America, respectively. The findings asserted that the funds with higher human capital efficiency outperform their counterparts significantly.…”