n Management Dynamics : Journal of the Southern African Institute for Management Scientists - The impact of the 2008 financial crisis on the performance of general equity unit trusts
|Article Title||The impact of the 2008 financial crisis on the performance of general equity unit trusts|
|© Publisher:||Southern African Institute for Management Scientists (SAIMS)|
|Journal||Management Dynamics : Journal of the Southern African Institute for Management Scientists|
|Affiliations||1 Stellenbosch University|
|Publication Date||Sep 2014|
|Pages||2 - 12|
This study evaluates the effect of the 2008 market crash on general equity unit trusts' performance persistence and performance relative to fund size. Fund performance relative to fund expenses after the 2008 market crisis is also assessed. Overall, managers' ability to remain in the same ranking quartile decreased after the 2008 market crash. The findings contradict the conclusion of previous studies that performance persistence decreased as lengthier subsequent periods were considered before and after 2008. Performance persistence patterns over six and 12 months changed significantly after the 2008 crisis. It is concluded that the total expense ratio of the funds should not be considered as an indication of expected performance. Contrary to the negative relationship between performance and unit trust size reported by studies before the crisis, this study did not reveal any significant relationship after the crisis. The largest funds proved to have the most stable quartile rankings after the 2008 financial crisis.
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