Size effecton Brazilian mutual funds

Abstract

DOI: 10.5902/198346593607 The mutual fund industry plays an important role in picking up and allocating resources in Brazil. This market has grown considerably since country’s economic opening, both in number of funds and in equity under management.This article aims to investigate the impact of size and size variation of Brazilian mutual fund equities on its performanceandthe impact ofthe fund’s age. Panel data of daily frequency was used to analyze 162 Brazilian mutual funds with different benchmarks and management styles, concerning the 2001-2009 period. Several regressions were estimated, including variables that catch the equity and age evolution and dividing the sample in quartilesaccording the fund mean equity size. The conclusions show that Brazilian mutual funds  May be subject to size effect because, in general, funds with larger equity size present better performance. Age’s influence depends on the fund category.