Efficiency of Mutual Fund Families (PDF)

The investment alternatives offered by mutual funds have hada significant effect on the savings patterns of many countries. Industryresearch has primarily focused on the funds themselves rather than on theirmanagement companies, but like other financial institutions, these companies,also known as mutual fund families, have experienced great periods of bothexpansion and contraction. It is important to address the efficiency of theseinstitutions, as well. Carlos Snchez Gonzlez fills this gap in our knowledge withthis empirical study. He develops an innovative model that considers themanagement stages of mutual fund companies, overcoming the traditional disputebetween the different approaches used in banking and insurance research. Usingdata envelopment analysis (DEA) to evaluate efficiency levels, Snchez Gonzlezinvestigates the Spanish case, one of the most relevant industries in the Euromarket, in order to provide insights into issues that have never been exploredbefore.His study consists of two parts. The first explains thebasic concepts, offers a brief explanation of the basic DEA models, and gives areview of the most important applications to financial institutions, all whiledeveloping a unique set of industry-specific variables in order to show how to applythe original slacks-based measure (SBM) approach. The second reviews the majorconcepts of SBM variations and shows how they can be applied to the Spanishmutual fund family industry in order to obtain unprecedentedly accurate empiricalmeasures of its efficiency.This ground-breaking work offers much food for thought toacademic researchers and postgraduate students of management, finance, andmarketing.