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Journal section "Sustainable development of territories, branches, and production complexes"

About the Assesment of the Working Time of a Fund Manager

Ivin E.A., Kurbatskii A.N., Slovesnov A.V.

1 (81), 2016

Ivin E.A., Kurbatskii A.N., Slovesnov A.V. About the Assesment of the Working Time of a Fund Manager. Problems of Territory's Development, 2016, no. 1 (81), pp. 96-114

Abstract   |   Authors   |   References
The paper analyzes the performance of leading Russian mutual investment funds and the Moscow Interbank Currency Exchange (MICEX) index. The authors use different methods to assess the time required for the company’s management to draw valid conclusions about the quality of a Fund Manager. The article also shows that the choice of the MICEX index as the benchmark is not always adequate, and in the end of the paper the authors propose a universal index and the program code to enable its use in MS Excel. When considering the issue of investing in stocks, two aspects are usually analyzed: the income, which investor can expect, and the period after which the shares will realize their potential. This article touches upon both these issues and shows how much time is needed for a reliable assessment of the yield of the chosen fund. The findings are based on historical data on return and volatility of the shares observed on the Russian market for the last seven years. The evaluation of the time interval obtained in this paper can be called the average period of implementation of an investment idea in shares. Therefore, if the investor at year-end has not made money off the shares, it does not mean that his/her investment was initially wrong – it could simply be bad luck. In other words, the research findings show that it is not necessary to invest in Russian shares with a horizon of less than 1.5 – 2.5 years. A similar situation is observed for equity funds. Certainly, an average person at a stock market should better choose a unit investment trust as a way of equity investment, but anyway it is not worth to trust investment advisers who promise you a profit in a few months

Keywords

Fund Manager, the Russian stock market, probationary period, weighted index