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To explain the shadow banking regime that will be enforced in the European Union by local regulators starting in January 2017.

Recognising the regulatory-induced difficulties in the process of identifying certain types of clients (investment funds) as shadow banking entities, this article provides a decision tree for the shadow banking classification process in order to aid the impacted institutions with the assessment of their clients. With this in mind, the article advises the impacted institutions on the specific steps that should be taken when assessing investment funds for shadow banking flags. Furthermore, the article provides insights into the information required to conduct the shadow banking classification process.

The regime requires the impacted institutions to assess their clients for shadow banking flags in order to impose limits on credit lines to clients classified as shadow banking entities. The US regulatory jurisdiction will be impacted over a longer term.

The recommendations in this article will be especially useful for investment funds to ensure that the relevant information is clearly stated in their prospectuses in order to avoid being classified as shadow banking entities.

To examine the rationale for the investment principles adopted by faith‐based funds from a biblical perspective and to evaluate the performance of faith‐based ethical funds.

A multi‐factor Carhart model is applied to examine the risk‐adjusted financial performance and investment strategies of faith‐based ethical funds.

The statistical results indicate that the faith‐based funds as a group do not under‐perform the market on a risk‐adjusted basis.

This suggests that investment managers may incorporate moral/ethical components into their investment decisions without unduly shortchanging their clients for whom they have fiduciary duties.

This is one of the very few papers which study faith‐based funds.

This study examines the fund‐level correlates of return and share price discount or premium for the closed end funds (CEFs) investing in emerging and developed capital markets. It also compares the performance of CEFs investing in emerging markets with similar types of funds that invested in the developed markets, especially significant in light of recent economic crises experienced by a number of such emerging economies and their ripple (contagion) effects felt in other emerging or developed capital markets. Lastly, as emerging markets constitute a wide array of countries with very different economic records, this paper looks into the performance of emerging markets CEFs by region as well as the performance of single‐country versus regional funds. Findings confirmed results of many studies of domestic and international open‐ or closed‐end funds on determinants of return and share price discount or premium. Emerging capital markets also continued to provide an outlet for international investors to improve their portfolio return despite significant volatility that surrounded them during the study period. Lastly, this study did not find any compelling evidence for consistent superior performance by CEFs investing in any particular region or country within the emerging markets.

The purpose of this study is to examine the market‐timing ability of mutual fund flows and how fund investors conduct asset allocation in response to market volatility.

The paper compares the abnormal returns of net inflow funds with those of net outflow funds, and it explores the performance gap between them based on a model that incorporates both market return timing and market volatility timing. The asset allocation pattern of fund investors and its relation to market volatility are also investigated.

This study finds that funds that receive net money inflows fail to earn risk‐adjusted abnormal returns, while funds with net outflows earn statistically significant negative abnormal returns. Neither the net inflow funds nor the net outflow funds show any ability to time the market return, but there is some evidence that net inflow funds exhibit an ability to time market volatility. Because cash holdings of the net outflow funds are much lower than that of the net inflow funds, it is concluded that the underperformance of net outflow funds is to an extent an asset fire sale.

The study results show that fund investors on the whole are driven by market volatility, and they do not have an ability to time the market return. The results do not exclude the possibility that a small number of investors possess market timing skills.

The study demonstrates the importance of funds' liquidity management through investor reaction to dynamic market conditions.

The present article aims to evaluate the performance of sixteen equity mutual funds operating in the Greek financial market over the period 1/1/1995‐31/12/1999. In doing so, the sample mutual funds were ranked on the basis of their return, total risk, coefficient of variation, systematic risk, and the techniques of Treynor, and Sharpe. Four mutual funds achieved lower return than the General Index of the Athens Stock Exchange (ASE). All sixteen mutual funds showed lower total risk, and risk‐return coefficient than the General Index of the ASE. In all mutual funds the beta coefficient was statistically significant at 5 per cent level of significance. The alpha coefficient was also statistically significant at 5 per cent level of significance in eight mutual funds. The movements of the General Index of the ASE explain more than 80 per cent of the variation in return in all sixteen mutual funds. Eight mutual funds were ranked in the same order on either Treynor’s or Sharpe’s technique.

We examine the benefits of active international mutual fund management. Is there an advantage to active fund management over investing in index funds? Previous research has found that for domestic funds, active fund management can not outperform index funds. But there has been no clear conclusion as to active international mutual fund management. We utilize Morningstar Mutual Fund data to analyze five international mutual fund categories, and overall, for a sample of 831 funds with 4,835 annual return data points. We find the difference in mean return (index minus fund return) is negative for all fund categories, except for Europe funds. The difference is significant overall and for four of the five fund categories. The results from the multivariate regression show no relationship between total return and expense ratio, but there is a significant positive relationship between total return and turnover, and a significant positive relationship between total return and fund size (LN net assets). As opposed to domestic mutual funds, it appears to be beneficial to select actively managed international mutual funds over index funds.

One of the implications of Islamic investment principles is the availability of Islamic financial instruments in the financial market. The main aim of this research is to observe the differences in terms of performance between Islamic and conventional mutual fund in the context of Malaysian capital market.

To achieve the major objectives of this paper standard methods wereused for evaluating the mutual funds performance, for example, Sharpe index and adjusted Sharpe index, Jensen Alpha, Timing and selectivity ability. The scope of the paper is to measure the relative quantitative performance of funds which was managed based on two different approaches.

The basic finding of the paper is that Islamic funds performed better than the conventional funds during bearish economic trends while, conventional funds showed better performance than Islamic funds during bullish economic conditions. In addition to that finding, both conventional and Islamic funds were unable to achieve at least 50 per cent market diversification levels, though conventional funds are found to have a marginally better diversification level than the Islamic funds. The results also suggest that fund managers are unable to correctly identify good bargain stocks and to forecast the price movements of the general market.

The main limitation is that the samples of conventional and Islamic mutual funds were from one developing market. The findings could be better validated if the sample included the mutual funds from other developed and developing economies, where both Islamic and conventional funds are available.

The findings suggest that having Islamic mutual funds in an investment portfolio helps to hedge the downside risk in an adverse economic situation.

So far there is no published evidence on the relative performance of Islamic and conventional mutual funds in Malaysia as well as other developing countries. Therefore, this paper adds new knowledge to the mutual funds literature.

The purpose of this paper is to examine operating characteristics, risk and performance measures of all available vehicles for index investing in US bond funds during the 15‐year period from April, 1994 to March, 2009. The results shed light on the important issue of bond index mutual funds (BIMFs) and bond exchange‐traded funds (BETFs) performance compared with average of all bond mutual funds.

Data were obtained from Morningstar Principia. Operating characteristics include expense ratios, annual turnover rates, and tax cost ratios. Performance measures include average annual returns and return percentile rank in category, risks (measured by standard deviation) and risk‐adjusted returns (measured by the Sharpe ratio).

BIMFs and BETFs have significantly lower expense ratios and annual turnover rates than category averages. Their returns and risk‐adjusted returns are significantly higher than bond category averages.

Future studies will be able to benefit from a larger sample size, longer performance records, and the strength of bond index funds in foreign markets.

Both BIMFs and bond exchange‐traded mutual funds have significantly lower expense and annual turnover rates, making them preferred investment choices.

Efforts by active bond mutual fund managers to beat index benchmarks have largely failed. Investors should be wary of bond mutual fund managers touting their ability to beat the average or a bond index.

The advantage of investment in BIMFs and BETFs is clear.

The purpose of this paper is to describe the emergence and current role of Enhanced Cash “Yield Plus” investment pools.

Provides an historical background and describes how Enhanced Cash “Yield Plus” investment pools define their investment strategies and invest their funds, now they are structured, marketed, and credit‐rated.

In just a few years, Enhanced Cash “Yield Plus” investment pools have emerged as a daily liquidity cash management complement to money market funds governed by Investment Company Act Rule 2a‐7. Yield Plus funds are a segment of the larger Enhanced Cash sector, which has been roughly defined as the market space of fund offerings between SEC Rule 2a‐7 money market funds and short‐term bond funds. Yield Plus funds (also known as “Cash Plus” funds) appear to be the most conservative funds in this sector, seeking to provide slightly higher returns for investors than money market funds, while maintaining a stable net asset value with daily liquidity. Only time will tell if “Yield Plus” funds become a true complement to, or perhaps even a replacement for, money market funds for institutional investors' short‐term cash management. In only a few short years, the success of these funds have proven that at least some market participants perceive the possible added risk is worth the potentially better return.

A useful introduction to an emerging class of short‐term investments.

This paper examines the implementation of best practices for fund directors as outlined by the Investment Company Institute (ICI) in the summer of 1999. Following a series of well publicised scandals across the financial services industry, the issue of corporate governance within mutual funds is both timely and practical. The purpose of the study is to measure the consistency of implementation of the 15 best practices within fund families. The data indicate that mutual funds, in general, currently follow the guidelines proposed by the ICI. This suggests that most funds are undertaking efforts to protect investors and separate the interests of management from those of investors. These findings also have implications for proposed federal legislation. If mutual funds have already adopted procedures designed to protect investors, additional regulation is redundant.