Mutual Fund Performance in Bull and Bear Market: The Case of Pakistani Mutual Fund

Table 2. Corrected Fama French Model R2 Estimated Value AFF 0.04 (-1.46) 0.03 (0.95) 0.55 * (2.77) 0.04 (0.76) - 0.01 (0.21) 0.41 AIF 0.003 (0.20) - 0.03 (-1.37) 0.39 * (2.96 ) -0.002 (-0.35) 0.006 (0.01) 0.33 AMZ - 0.02 (- 0.54) 0.016 (0.14) 0.61 * (2.38) 0.006 ** (1.75) - 0.007 (- 0.63) 0.35 ASFL - 0.02 (- 0.27) 0.02 0.24) 0.41 ** (1.79) 0.001 (0.08) 0.004 (0.16) 0.37 ASMF - 0.03 (-1.67) 0.04 (1.55) 0.71 * (4.70) - 0.001 (- 0.23) - 0.01 (-1.46) 0.55 BSJ 0.02 ) 0.04 (0.76) 1.005 * (3.33) 0.003 (0.39) 0.02 *** (1.76) 0.33

Index funds are mutual funds managed passively by fund managers. They are less than traditional mutual funds, but in many cases it has proven to be superior to traditional funds. The index fund follows the stock price index like the Standard & Poor's 500, not letting the fund manager select the shares individually. As these funds reflect the performance of the index, no fund managers are needed. The stock price of a closed-end fund is usually a premium or discount, of course, it is affected by the supply-demand law. However, before buying discount shares, we recommend investigating the fund's past performance to ensure that the value of these shares will rise. Otherwise, you probably bought some stocks of poor funds.

Popular mutual funds are still index funds. Last year, it was estimated that 20% of all funds invested in the US stock market were put into index funds. These mutual funds are linked to the performance of the index such as Dow Jones Industrial Average Price or S & P 500 Index. The index is simply a collection of stocks selected according to a specific gauge. Importantly, the criteria for inclusion of stocks in certain indexes can change over time. For a typical mutual fund there is a portfolio manager that eventually chooses, but the index fund uses the criteria of a particular index. In other words, people behind the index are ultimately responsible for investing in money.