Appraising the Effect of Internal and External Organization Factors on Investment Mutual Funds' Return In Iran

Abstract

One of the main functionalities of capital market is to improve liquidity<br />in the market which provides security for the investors. Mutual funds are<br />modern financial institutions which are designed with the aim of collecting<br />funds from investors and devote them to buy a variety of securities in<br />order to mitigate investment risks, exploit the economies of scale and<br />finally create a reasonable return for investors. Regarding effective role of<br />these funds, the goal of this research is presenting a model to review the<br />main and important factors of internal and external organizational<br />variables on funds return. In order to scrutinize the effect of variables of<br />research on funds' return, the Fama-MacBeth multilateral regression<br />model was exerted. We gathered data from 13 authorized mutual funds<br />during a 65 week period or 16 months. Results denote that there is a<br />meaningful and positive correlation between, internal organization factors<br />of funds' ex-fluctuations of returns, funds' last periods' return, and also<br />external organization factors of funds' age, funds' assets turnover rate<br />and the funds' acquired return. The evidences also imply that there isn't<br />any positive and meaningful correlation between internal organization<br />factor of assets' under funds managers' control, and external organizationfactor rate of injection of new money to funds and the funds' acquired<br />return.