The 80–20 Rule of Mutual Fund Families in the U.S.

Vaidyanathan, K (2011) The 80–20 Rule of Mutual Fund Families in the U.S. The Journal of Index Investing, 2 (3). pp. 82-92.

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Abstract

This article provides empirical evidence that the levels of assets under management of mutual fund families in the U.S. closely follow a Pareto distribution. The author demonstrates theoretically that this can happen only if the large fund families have non-distinct investment skills and proves that heterogeneous investment talents among the large funds would lead to a non-Pareto distribution. The empirical assets under management distribution suggests that funds face similar return distributions, which leads to the conclusion that either “bargains” do not exist or every fund has an equal probability of getting a “bargain.”

Affiliation: Indian School of Business
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ORCiD
Vaidyanathan, K
UNSPECIFIED
Item Type: Article
Additional Information: The research paper was published by the author with the affiliation of Quantum Phinance in Mumbai.
Uncontrolled Keywords: Mutual Fund, Assets under management, USA
Subjects: Finance
Depositing User: Ilayaraja M
Date Deposited: 21 Jun 2019 21:20
Last Modified: 21 Jun 2019 21:20
URI: http://eprints.exchange.isb.edu/id/eprint/1166
Publisher URL: https://doi.org/10.3905/jii.2011.2.3.082
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