Identifying a successful mutual fund investment involves a crucial analysis of alternatives, all of which influence the true benefit of the investment. Major considerations must include performance, management and fees; which ultimately determine investment returns. Studies have shown that team managed mutual funds exhibit similar risk adjusted performance to individually managed mutual funds, however studies lack this comparison of performance based on fund fees and investment objective. This gap in research implies that there is an opportunity to examine how fund management, investment objective, and fund fees affect overall returns to the investor. Using the 2010 Center for Research in Security Prices (CRSP) database, this study provides an examination of team managed and individually managed mutual funds with given investment styles on the basis of fees and overall returns. This study finds empirical evidence that team management has a significant negative effect on equity objective mutual funds, while having a positive impact on Debt and Equity combination funds. In addition, our research concludes that team management has no significant effect on funds whose primary focus is debt. Across the majority of fund objectives, the added benefit of team management in the mutual fund industry continues to be outweighed by the increased cost of a team managed operating structure.
Recommended CitationCehanowicz, Kendal, "Investment Styles, Fees, & Returns Among Individually Managed & Team Managed Mutual Funds" (2011). Honors Projects in Finance. Paper 15.