Value creation and determinants of equity fund performance

This study investigates performance-related factors across major equity fund classifications. The results indicate that risk- and fee-adjusted returns are generally enhanced by managerial tenure and fund size. Fund longevity is positively and significantly associated with the adjusted returns of growth funds. However, value is diminished, by higher fees that do not yield commensurate returns. Similarly, sales loads do not generally add value to investors. In addition, funds with higher minimum purchase levels do not seem to generate efficiency or gains for their investors. (C) 1999 Elsevier Science Inc. All rights reserved.