What drives fund flows to index ETFs and mutual funds? A panel analysis of funds in India

Narend, S.; Thenmozhi, M.

doi:10.1007/s40622-016-0124-6

Cited by 9 publications

(3 citation statements)

References 21 publications

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“…Following the existing literature (Rompotis, 2012 ; Reddy, 2012; Alam, 2013 ; Narend & Thenmozhi, 2016 ; Sethi, 2016 ; Malhotra et al, 2016 ; Singh & Kaur, 2016 ) we estimate the performance and tracking efficiency of the sample equity ETF’s.…”

Section: Methodsmentioning

confidence: 99%

“…Sethi ( 2016 ) found that management expenses and risks positively impact the tracking error of the ETF. Other factors that can impact the level of tracking error of an ETF include the differences in investment styles, market capitalization, number of securities and index volatility in the ETF portfolio (Aber et al, 2009 ; Rompotis, 2010 , 2011 , 2012 ; Bello, 2012 ; Buetow & Henderson, 2012 ; Charupat & Miu, 2013 ; Reddy, 2013 ; Bas & Sarioglu, 2015 ; Narend & Thenmozhi, 2016 ; Sethi, 2016 ; Singh & Kaur, 2016 ). In this study, we follow three most frequently adopted methodologies of estimating tracking error (Frino & Gallagher, 2001 ; Charupat & Miu, 2013 ; Narend and Thenmozhi, 2014 , 2016 ; Rompotis, 2010 , 2012 ) which are as follows.…”

Section: Methodsmentioning

confidence: 99%

“…The growth and popularity of ETF’s makes it imperative to understand the potential returns that ETF’s can generate to the investors as they have captured their attention and have attracted billions of dollars in investments (Gastineau, 2008 ). The benefits and advantages that are offered by ETF’s when compared with Index funds (or similar funds) are analyzed in an array of studies (Aber et al, 2009 ; Dellva, 2001 ; Narend & Thenmozhi, 2016 ; Prather et al, 2009 ; Rompotis, 2009 ; Schizas, 2014 ; Svetina, 2010 ). They find that their ability to trade like a corporate stock, tax efficiency obtained due to redemption in kind, lower management fees and risk diversification features enable ETF’s to be a successful and profitable addendum to the available investment products in the market.…”

Section: Literature Reviewmentioning

confidence: 99%

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Investment Performance and Tracking Efficiency of Indian Equity Exchange Traded Funds

Alamelu¹,

Goyal

2022

Asia-Pac Financ Markets

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Exchange Traded Funds (ETF’s) are one of the beloved passively managed funds that offer both retail and institutional investors an access to highly profitable and wide- range of diversifiable financial assets. The study aims to assess the ability of Indian equity ETF’s in replicating the performance of their benchmark indices using a sample of 27 equity ETF’s traded on the National Stock Exchange of India during the pre-pandemic period from 01/01/2015 to 31/12/2019. Evaluation of the performance of sample ETF’s through risk-return analysis, risk-adjusted performance measures, tracking error analysis and multi-factor regression have revealed that the majority of the sample ETF’s outperformed their tracking indices but with notable tracking errors during the study period. Further, the study also indicates that the returns of the sample ETF’s have a significant and positive relationship with the returns of the index but are inversely related to risk and management fees. The results of this study will have major implications for investors in evaluating the performance of ETF’s and fund managers as well in taking suitable measures to reduce tracking errors that will help in successful replication of the benchmark along with undertaking initiatives that will enable the ETF’s to become price efficient.

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