Matching Items (2)
Description
Since the 2008 financial crisis, the total assets managed by U.S. mutual funds have frequently hit new highs and the industry has become increasingly concentrated. In the meantime, two strategies have emerged in the American mutual fund industry: active and passive management. What factors affect the market shares of firms that adopted these two different strategies?
Building on strategic management theories, I suggest that mutual fund families that adopted active and passive management strategies tend to compete in different dimensions. Active management fund families tend to implement the product differentiation strategy, competing on “product quality” through excess-returns, innovative and differentiated fund products; passively managed fund families focus more on "price competition" by conducting an overall cost leadership strategy.
This research examines the driven factors of fund families’ market share. The results show that: the market share of actively managed fund families is more sensitive to positive impact of fund performance, while passive management firms are more sensitive to negative effect of management fees and total loads; 12b-1 expense improves the competitiveness of active fund families and thus enhance their market shares but it has negative impact on passive fund families. In addition, high turnover decreases the market share of all fund families, especially for passively managed families. The outcome reveals the latest US mutual industry orientation: products differentiation, turnover, management fee have greater impact on market share while the competition of fund performance is diminishing. The Matthew effect in US mutual fund industry is outstanding. Industrial competition dimension expands from performance and products to cost cutting.
Empirical analysis on Chinese mutual fund families is also conducted. Different from the US, there is only small number of mutual fund families targeting passive management products. The results show that the distribution channel has the largest impact on Chinese mutual fund family market share and investors are more willing to chase performance than to consider cost-efficient fund families. This study then analyses reasons behind the difference of Chinese and American mutual fund industries.
Building on strategic management theories, I suggest that mutual fund families that adopted active and passive management strategies tend to compete in different dimensions. Active management fund families tend to implement the product differentiation strategy, competing on “product quality” through excess-returns, innovative and differentiated fund products; passively managed fund families focus more on "price competition" by conducting an overall cost leadership strategy.
This research examines the driven factors of fund families’ market share. The results show that: the market share of actively managed fund families is more sensitive to positive impact of fund performance, while passive management firms are more sensitive to negative effect of management fees and total loads; 12b-1 expense improves the competitiveness of active fund families and thus enhance their market shares but it has negative impact on passive fund families. In addition, high turnover decreases the market share of all fund families, especially for passively managed families. The outcome reveals the latest US mutual industry orientation: products differentiation, turnover, management fee have greater impact on market share while the competition of fund performance is diminishing. The Matthew effect in US mutual fund industry is outstanding. Industrial competition dimension expands from performance and products to cost cutting.
Empirical analysis on Chinese mutual fund families is also conducted. Different from the US, there is only small number of mutual fund families targeting passive management products. The results show that the distribution channel has the largest impact on Chinese mutual fund family market share and investors are more willing to chase performance than to consider cost-efficient fund families. This study then analyses reasons behind the difference of Chinese and American mutual fund industries.
ContributorsLiu, Jianping (Author) / Zhu, Hongquan (Thesis advisor) / Chang, Chun (Thesis advisor) / Yan, Hong (Committee member) / Arizona State University (Publisher)
Created2018
Description
A fundamental question in the field of strategic management is how companies achieve sustainable competitive advantage. The Market-Oriented Theory (MOT), the Resource-Based Model and their complementary perspective try to answer this fundamental question. The primary goal of this study is to lay the groundwork for Standardized Strategic Assessment Framework (SSAF). The SSAF, which consists of a set of six models, aids in the evaluation and assessment of current and future strategic positioning of Small and Medium Enterprises (SMEs). The SSAF was visualized by IDEF0, a systems engineering tool. In addition, a secondary goal is the development of models to explain relationships between a company's resources, capabilities, and competitive strategy within the SSAF. Six models are considered within the SSAF, including R&D; activities model, product innovation model, process innovation model, operational excellence model, and export performance model. Only one of them, R&D; activities model was explained in-debt and developed a model by transformational system. In the R&D; activities model, the following question drives the investigation. Do company R&D; inputs (tangible, intangible and human resources) affect R&D; activities (basic research, applied research, and experimental development)? Based on this research question, eight hypotheses were extrapolated regarding R&D; activities model. In order to analyze these hypotheses, survey questions were developed for the R&D; model. A survey was sent to academic staff and industry experts for a survey instrument validation. Based on the survey instrument validation, content validity has been established and questions, format, and scales have been improved for future research application.
ContributorsDemir, Mustafa (Author) / Waissi, Gary (Thesis advisor) / Humble, Jane (Committee member) / Polesky, Gerald (Committee member) / Arizona State University (Publisher)
Created2012