The Relationship Between Fund Performance and Fund Characteristics: Evidence from India

This study examines the relationship between fund performance and fund characteristics. The fund performance is measured by fund return and its determinants are measured by standard deviation, fund size, turnover ratio, income ratio and expenses ratio. The study employs panel data analysis and observes that the fund performance is positively influenced by its volatility, size and expenses ratio, and negatively related with turnover ratio. The study also finds no evidence of income ratio relating to fund performance. Overall, the study observes that the fund managers are generally not aggressive to new information in the market. Moreover, the return generated by fund managers also seems to be insufficient to cover the costs associated with investments.