A framework of assessable mutual fund performance

Abstract

Purpose This paper tries to find how investors evaluate mutual fund performance, not only based on both quantitative but also qualitative criteria. Design/methodology/approach This paper adopts the modified Delphi method and the analytical hierarchy process (AHP) to design an assessment method for evaluating mutual fund performance. Findings The most important criteria of mutual fund performance should be “mutual fund style,” following is “market investment environment.” This result indicates investors' focus when they evaluate the mutual fund performance. Research limitations/implications The AHP assumes the criteria are independent between each other. However, in many real cases, the criteria to evaluate the funds' performance may not be independent. Therefore, the authors recommend correlation between each criterion can be considered in the future research. Practical implications When making investment decisions, investors should be more concentrate on gathering information of mutual fund style. As for mutual fund issuers, they could also leverage these results to communicate with their clients in more efficient way. Originality/value This study presents a framework of assessable mutual fund performance where the AHP were employed for finding the both tangible and intangible key criteria of performance evaluation.