John C. Adams

The Performance of Faith-Based Funds

This article examines the performance of faith-based mutual funds for the period 1998 to 2009. It compares the performance of this group of funds with socially responsible funds and with all U.S. equity mutual funds. The article also examines the factors that account for the cross-sectional differences in fund returns.

Diseconomies of Scale in the Actively-Managed Mutual Fund Industry: What Do the Outliers in the Data Tell Us?

Diseconomies of Scale in the Actively-Managed Mutual Fund Industry: What Do the Outliers in the Data Tell Us?

Do Long–Short and Market Neutral Mutual Funds Sail on an Even Keel?

Long–short and market neutral funds seek superior risk-adjusted returns while limiting their exposure to stock market risk. Over the 1999 to 2013 period, the number of funds with these investment objectives increased by more than 700%. Despite their growing popularity, the authors find that long–short and market neutral funds deliver lower risk-adjusted returns than U.S. Treasuries. Their investigation also reveals that the returns of both types of funds are positively and significantly correlated with the stock market. However, both fund types perform better in down markets. Finally, the authors report that market neutral funds outperform long–short funds.

Currency Markets, Performance, and Mutual Fund Cash Flows

We analyze cash flows in and out of US based domestic and international mutual funds. Our results suggest that currency market changes are important considerations when investors decide to purchase or redeem mutual fund shares. Specifically, we find that increased foreign currency values are positively related to fund flows. While exchange rates are important considerations for investor cash flows in and out of domestic and international funds, we find that foreign fund flows are more sensitive to exchange rates. Furthermore, the increased flows into international funds over the 1998–2007 sample period are not exclusively due to superior risk adjusted performance relative to domestic funds.