Value creation and determinants of equity fund performance

This study investigates performance-related factors across major equity fun d 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 gro wth funds. However, value is diminished, by higher fees that do not yield c ommensurate returns. Similarly, sales loads do not generally add value to i nvestors. In addition, funds with higher minimum purchase levels do not see m to generate efficiency or gains for their investors. (C) 1999 Elsevier Sc ience Inc. All rights reserved.