The Determinants Of Mutual Fund Growth In Pakistan - Free Essay Example

Sample details Pages: 19 Words: 5742 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? This study is actually about the mutual fund growth and the determinants which are influencing on the growth of these funds. We ask whether the growth of funds is influences by the management fee, family proportion and the expense ratio or not. How much these variables influenced the growth of funds. Don’t waste time! Our writers will create an original "The Determinants Of Mutual Fund Growth In Pakistan" essay for you Create order We further check out the relation of the family assets and the return on the funds with the performance of the funds. Investors are paying the charges to control the funds and for the growth of the funds in the shape of management fee and the administrative charges. We study the behavior and the output of the funds from the duration of 2005-2009. We selected the funds which are listed in KSE. The funds are selected which are in the family proportions because of the nature of regression model which is used for the calculation of the effect of determinants on the growth of the funds. We use two models for the interpretation of the data. These are fixed effect model and cross section model. Through these models we elaborate the effects of different factors on the growth of these funds. We focus on the management fee for checking the efficiency of the funds management. Whether these are contributing in the growth of the funds or not, if not then these fee is only for the benefit of funds management INTRODUCTION In Pakistan the mutual fund industry handles a significant portion of the assets of individual investors. Basically there are many factors which can affects on the growth of the mutual fund. In these determinants of the mutual funds which can affect the growth of the mutual fund we are focusing on the management fee, the main focus is on the charging of the management fee and its impact on the growth. Whether it is beneficial for the growth or not? Along with this we are determining some other major determinants of which can influence on the growth of these funds in Pakistan. Compensation to managers is primarily in the form of a Management fee. With few exceptions, Management fees are charged as a percentage of the assets under management rather than on the basis of performance. It is therefore in the interest of management to grow the total assets in the fund and in the associated fund family. One tool that managers may use to grow funds is the Management fee. The fees, which are limited to1% to 3% per year as Management fee, are used to cover administrative costs. This paper studies whether or not the charging of a Management fee support the investors by growing the worth of mutual funds family along with that of some other determinants. Next we checked that the charging of Management fee leads to greater cash inflow for the funds which charge them. We focus on various mutual funds existing in the Karachi Stock Exchange and listed there, in order to control for the variety of commission payment schemes associated with management fee charging funds that are now available to shareholders and are in the group of families charging Management fee. LITERATURE REVIEW These are some of the review from the experts and the researchers. Academic opinion on mutual fund fees is generally critical. Bogle, points out that the average cost of owning mutual funds has risen over 100 percent in the last sixty years. Freeman and Brown contend mutual fund advisory fees alone are excessively high. In their view the mutual fund industry is dominated by conflicts of interest where the mutual fund boards fail to negotiate arms-length management contracts with asset managers. In their view asset managers are over compensated for the services that they provide. Similarly Ang, Chen and Lin argue that the primary benefit that managers can provide to the shareholders is the reduction of expenses. The reason is that management has more control over expenses than over any other aspect of the return to the shareholders. Therefore, if managers are not working to reduce expenses they are failing to carry out their primary duty to the shareholders. Golec found that fund managers are compensated primarily on the basis of a percentage of the assets under management. That compensation scheme provides fund managers with a strong incentive to grow fund assets regardless of the degree to which such growth is consistent with shareholder welfare. Collins, along with Livingston and ONeal (1998) and ONeal (1999) argue that some investors pay to receive professional investment advice and assistance in the purchase of mutual funds. Essentially they argue that brokers provide some combination of resolving asymmetric information for investors and providing a needed service in completing and maintaining the required records in order to complete the investing process. We closely examine the issue of whether brokers primarily resolve asymmetric information or primarily provide investors with record completion and maintenance services. One way to grow the assets is to well manage the fund by the fund management of that varies funds. Management fees provide a source of funds for controlling and managing the funds. Naim Sipra (2008) one of the interesting things to note is the low correlation between the funds and the market portfolio. In US studies the correlation between the market and mutual funds is often 0.9 or above. A high correlation with the market is an indication of a high degree of diversification. The low correlation in the Pakistani case suggests that the mutual funds are not doing a very good job of diversification. The low correlation and also the low betas are probably due to inclusion of fixed income securities such as the Term Finance Certificates (TFCs) in the portfolios of these funds. Since the composition of the funds is not publicly known therefore it is not possible to analyze this issue any further. Ali S M, Malik A S (2006) A Capital markets play a vital role in the economic development of a country. It is now widely accepted that there is a direct correlation between economic growth and the development of the fina ncial sector. Mutual funds are considered to be an important source of injecting liquidity into the capital markets. A well established financial intermediation system facilitates the economic activity by mobilizing domestic as well as foreign savings. Muhammad Akbar Saeed (2004) during the last two years, mutual fund sector has more than tripled in size to Rs. 112 billion (as of 31-Dec-04). The industry players are predicting that the business is likely to grow by 200 percent over the next five years. The success of the industry will lie in several factors, one of which will be the role of regulators and their efforts to continuously evolve the code of corporate governance for the mutual fund industry. Moeen Cheema and Sikandar A. shah (2006) Mutual funds are becoming vehicles of securities investments most favored by the general public worldwide. Whereas, this trend is more pronounced in the developed securities markets of the United States of America and Europe, mutual funds a re increasingly gaining the public attention in the developing economies as well. Pakistan is not an exception to this global trend and even though mutual funds form a comparatively small segment of the securities markets, they have grown phenomenally over the last few years. According to the Mutual Fund Association of Pakistan (MUFAP), whereas mutual funds may not shield investors from the risks associated with overall market failure, the ability to diversify that they provide may reassure public investors as regards the failure of individual companies and hence make them less wary of insider opportunism in any given corporation. We similarly consult some of the related articles for this purpose, which can be seen from the references. We also consult some of the conflicting matters with the course instructor. In summary, Management fee is basically for the controlling of the mutual funds and for the growing purpose of the funds. But is it working well for the growth of the mutua l funds which funds are being charging this fee. HYPOTHESES AND METHODOLOGY This paper studies whether the shareholders income and their wealth increase from the growth of the mutual funds through the charging of Management fees. The main focus on the Management Fee but there are some other determinants like family proportion, expense ratio, return through sharp ratio and assets turnover in that specific duration which we selected for the research purpose. There are a number of ways in which investors could enjoy by the growing of wealth from funds which charge this fee. Since the fee is used for administrative expenses. It could aid investors by making them aware of high quality managed funds that might otherwise be invisible to them. There are several possible examples of funds where this might apply. First, funds charging this management fee lead the higher total returns. Funds with greater total returns would benefit investors in that, if the superior performance was persistent, investors would have a higher terminal wealth from investing in these f unds than they would have from investing in other funds. A fee showing the existence superior total returns would be of great of interest to investors. The null hypothesis: Ho: There is no difference between the total returns of mutual funds that charge the Management fee and those that do not charge the Management fee will be tested. Second, the Management fee might be a signal to investors of a greater risk adjusted rate of return. A greater risk adjusted return would imply that investors could earn superior returns with less chance of loss with respect to other portfolios offering the same level of return. The second null hypothesis to be tested is: Ho: There is no difference in risk adjusted returns between the risk adjusted return of mutual funds that charge the Management fee and those that do not charge the Management fee. 2nd hypothesis will be tested using Sharpe Ratio. It needs to be noted that these null hypotheses could be rejected either because the funds charging the Management fee over perform or because they under perform. If there is persistent over performance, the over performance is in the interest of the investors. However, persistent under performance would mean that the fee being paid by the investors is being used to let them know that these mutual funds are not performing well that will leave the investors with less terminal wealth. Such a result would be consistent with the view that Management fees are inconsistent with shareholders income growth. Third, the funds charging the Management fee could be the funds that have lower expense ratios. The numerator of the expense ratio includes all of the operating costs of managing the fund; including the management fee and other administrative costs as well as all the expenses. It may be that after the Management fee is removed from the expense ratio the fund has lower expenses than other funds. Such a result would support the idea that the fee itself is merely a substitute for other costs and that the investor in such a fund is no worse off, and could be better off than the investor in a fund that does not have the fee. The null hypothesis to be tested is: Ho: There is no difference of the expense ratios of the funds on the growth of the mutual funds. 3rd hypothesis will be tested after subtracting the Management fee from the expense ratio. The null hypothesis could be rejected because the funds charging the fee have lower expense ratios or because the funds charging the fee have greater expense ratios. In the first case the management fee would be in the interests of shareholders and in the second case the fee would not be in the interests of shareholders. If it is found that the management fee is not supporting the growth of the mutual funds of shareholders, the other alternative is that the fee is in the favor of the fund management. It would be in the interest of fund management to charge the management fee if the existence of the fee le d to faster asset growth than could otherwise be expected. Management desires faster asset growth because of the manner in which management is compensated. Fourth, managers might be using management fees to grow funds more rapidly than they would otherwise be growing. The growth of the fund from time t to t+1 is defined as: Gi = (Assetst Assetst -1(1+R))/Assetst -1 (1)à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Equation Where Gi is the growth rate in the assets under management by fund i from time t-1 to time t. Assetst are the net assets under management at time t. Since the assets under management may grow either due to new sales or returns, equation 1 eliminates the growth that is due to returns. For all of the funds in the study, the management fee is based on the net assets under management which may provide a managerial incentive to grow the fund as rapidly as possible. Ho: The growth rate of mutual funds that charge management fee is higher as compare to the funds which are not charging the fee. We will test whether the funds that charge the fees actually are growing faster using a regression model that controls for risk adjusted return, asset turnover rate, the relative size of the mutual fund within a family of funds, the expense ratio of the fund other than the management fee and the level of the management fee. Gi = ÃŽÂ ² 0 + ÃŽÂ ² 1RARi + ÃŽÂ ² 2ATi + ÃŽÂ ² 3ASSETi + ÃŽÂ ² 4FAMPROi + ÃŽÂ ² 5ERi + ÃŽÂ ² 6FEEi + ÃŽÂ ² i à ¢Ã¢â€š ¬Ã‚ ¦2) Equation Gi is the growth due to new investment in funds i from previous year t to current year t+1. Growth is defined by equation 1. This sign (?) Measures the sensitivity of the growth rate of the mutual fund to the specified factor in each case. An expected positive sign means that the growth rate is expected to respond positively to increases in the variable. An expected negative sign means that the growth rate is expected to respond negatively to increases in the variable. T he expected sign is specified for each of the control variables. RARi is the risk adjusted returns on fund i from year t to t+1, estimated by using the Sharpe Ratio. In accordance with past findings, this control variable is hypothesized to have a positive sign and does take a positive sign. ATi is the asset turnover for fund i which is measured through the formula of Net Income divided by the Total Assets. Turnover is a measure of investing activity. The greater the turnover, the greater the cost of operating the fund. Holding all else equal, the greater the cost of operating the fund the lower the growth in the fund. This variable is hypothesized to have a negative sign and does have a negative sign. ASSETi is the total assets of fund i at time t. The larger a fund, generally, the older the fund is so that assets serve as a proxy for the age of the fund. The older a fund, the more well known the fund is to the investing public and the easier it will be to sell the fund. A ssets are expected to and do have a positive relation with growth. FAMPROi is the proportion of the mutual fund family assets made up by fund i. The larger the proportion of the family assets in the fund the slower will be the growth, as management efforts will be directed primarily at the newer, smaller funds. This variable is expected to have a negative sign and generally has a negative sign. ERi is the expense ratio of fund i , less the management fee from all the expenses. The expense ratio includes all of the costs that the management company charges to the fund including the management fee, trading costs, and any other expenses. Since the purpose of the test is to isolate the effect of the management fee, that fee is subtracted from the expense ratio. The greater the expense ratio, the lower the growth. Investors should prefer a lower cost fund to a higher cost fund. The variable generally has the expected negative sign. FEEi is the level of the Management fee. For th e vast majority of the funds in the study, this variable will be charged by 1% to 3%. It is expected that the null hypothesis will be rejected and that this variable will have a positive sign which is generally the case. The regression model (Equation 2) is estimated on an annual basis for the years 2004 through 2009 for all funds that have all required data available. Equity and fixed income funds are examined separately. A positive and significant sign on the FEE variable will lead to a rejection of the null hypothesis and will be consistent with the idea that the Management fee is used by management to increase growth in assets. There are two economic rationales that apply to the imposition of the Management fee on mutual fund investors. The first is that investors are the primary beneficiaries. The second is that fund management is the primary beneficiary of the fee. The major contribution of this paper is to determine whether the facts are more consistent with the investo rs or the managers being the beneficiaries for mutual funds. THE DATA All of the data are taken for the years 2004 through 2009. Since 2004 is the first year and lagged data is needed, the results are presented for all funds for which all data was available for 2005 through 2009. The data are summarized in the table form and data is regarding the equity funds. As far as the collection of the data is concerned so we consult many sources for the collection of the data. Mainly we collect it from KSE. From where the full data was not available and after that we consult the Business recorder, Statistical Bulletin of Pakistan [Federal Bureau of Statistics (2005)] for 2005-2009 and SBP for the collection of the financial reports and the kibor rates. The net asset values are collected from the KSE as well as from Brecorder. The data available in the form of tables and excel sheet which is attach along with this article. Mainly we collect the data of the equity mutual funds. Our focus was on most commonly known mutual funds of the Pakistan market. We selected almost 21 mutual funds from the KSE available sources but because of the running of Regression Model, for which we need only the family funds which are in the form of groups. We neglect the individual funds because of the family proportion concern. So now the data available is of 13 mutual funds which are in the form of family. From that we could generate the family proportion of the mutual funds assets. Because the amount of the data was less for five years so we take the data in the panel form representing through panel EGLS. RESULTS These are some of the results which we conclude from the help of the CROSS SECTION MODEL FIXED EFFECT MODEL. In econometrics and statistics, a fixed effects model is a statistical model that represents the observed quantities in terms of explanatory variables that are all treated as if those quantities were non-random. This is in contrast to random effects models and mixed models in which either all or some of the explanatory variables are treated as if they arise from the random causes. Often the same structure of model, which is usually a linear regression model, can be treated as any of the three types depending on the analysts viewpoint, although there may be a natural choice in any given situation. In panel data analysis, the term fixed effects estimator (also known as the within estimator) is used to refer to an estimator for the coefficients in the regression model. If we assume fixed effects, we impose time independent effects for each entity that are possibly correlate d with the regressors. The major attraction of fixed effects methods in non-experimental research is the ability to control for all stable characteristics of the individuals in the study, thereby eliminating potentially large sources of bias. Within-subject comparisons have also been popular in certain kinds of designed experiments known as changeover or crossover designs (Senn 1993). In these designs, subjects receive different treatments at different times, and a response variable is measured for each treatment. Ideally, the order in which the treatments are received is randomized. The objective of the crossover design is not primarily to reduce bias, but to reduce sampling variability and hence produce more powerful tests of hypotheses. Fixed effects methods cannot estimate coefficients for variables that have no within-subject variation Time-series cross-section (TSCS) data harness both cross-temporal and cross spatial variation to maximize empirical leverage for theory ev aluation. However, this powerful data structure also requires careful consideration of temporal and spatial (cross-unit) heterogeneity, temporal and spatial dynamic processes, and potentially complex stochastic error structures. In the table 1 which is descriptive table and that is showing the mean, median and standard deviation as well. As it is clear and shows from the descriptive table that the sharp ratio, which is basically the return calculation through the sharp measure, is the negative impact on the growth of the mutual fund. As you will increase the return on the funds or the return increases over the amount of the funds the impact of it is negative on the growth of the mutual fund. Similarly the coefficient of this sharp ratio is also negative impact on the growth of the mutual funds. Now secondly, the asset turnover showing, the mean in the descriptive table representing the negative value which means that if the asset turnover will be negative so it can reduce the gro wth of the mutual funds. Assets are in the positive form and they show that if the asset of the fund increases so it means that the impact of this on the growth of the fund is positive and it contribute in the growth of the mutual fund. The family proportion of the mutual fund should have the positive impact on the growth of the mutual fund and in the table 1 of the descriptive result, the result of this is positive so it means that the family proportion increasing in this which is the positively impacting on the growth. Expense ratio is resulting negatively on the growth of the funds, and the management fee which is the basic testing of this is also showing the negative impact on the growth of the mutual funds in Pakistan. TABLE NO. 1 Descriptive Analysis GR SR AT ASSET FP ER FEE MEAN 3.989 -1.096 -0.008 2633207 0.365 1.262 54455166 MEDIAN 0.005 -0.540 0.010 1435134 0.410 1.260 38342000 MAX. 63.590 2.290 0.450 14193216 1.000 10.900 2.49708 MIN. -27.660 -5.010 -1.070 0.00000 0.000 0.000 0.00000 STD. DEV 12.763 1.470 0.272 3060791 0.255 1.644 53774795 SKEW. 2.134 -0.946 -1.834 1.951847 0.187 4.008 1.599424 PROB. 0.000 0.004 0.000 0.0000 0.729 0.000 0.0000 SUM 259.290 -71.278 -0.525 1.71608 23.400 82.060 3.54709 OBS. 65 65 65 65 65 65 65 TABLE NO. 2 Correlation Matrix DETERMINANTS GR SR AT ASSETS FP ER FEE GR 1.000 -0.269 -0.578 -0.163 0.062 0.100 -0.146 SR -0.269 1.000 0.360 0.124 0.174 -0.186 0.132 AT -0.578 0.306 1.000 0.139 0.071 -0.403 0.125 ASSETS -0.163 0.123 0.193 1.000 0.503 0.084 0.972 FP 0.061 0.174 0.071 0.503 1.000 0.270 0.538 ER 0.100 -0.187 -0.403 0.084 0.270 1.000 0.058 FEE -0.146 0.133 0.125 0.972 0.538 0.058 1.000 Now further according to the table 3 which is Fixed Effect Model, we design a panel least squares method in this model for the calculation of the data, in that the sharp ratio is resulting in the negative form and show the result that as the return on the mutual funds increases the growth effected negatively. The coefficient of the sharp ratio is negative and the result is showing significance, which is acceptable. After that assets turnover of it is in negative figure which shows a negative impact on the growth and the prob. Is significance we are keeping the level of the significance here is 0.10. The coefficient of the family proportion is positive thats good for the growth of the mutual fund but it is not significance because the prob. is higher than the level of significance. The expense ratio is showing the negative result, which means that the increase of the expense ratio is a negative impact on the growth of t he mutual funds. Its coefficient value is negative and the value is significant according to the fixed effect model. Now comes the management fee, according to this model the management fee is resulting in the positive value for the fund, that means that the funds that using the Management fee are contributing in the better growth of the fund because the coefficient value is positive but according to this model the fee is not significant here, the result is that the funds charging the fee can make the funds growing as compare to the funds that are not charging the management fee. The factor we assume here that the management fee effect positively for the growth of the funds but because of the political instability and the country economic situation it is not resulting good in the growth of the mutual funds in Pakistan. Lastly according to this model, value of Lassets is positive and the significant level is good which shows the Lassets significant. We take the assets here despite of the assets because of the mismatch and not the proper results from the assets. So it is impacting positively on the growth of the mutual fund. If it increases the mutual fund growth will increase. TABLE NO. 3 Fixed Effect Model Dependent Variable: GR Method: Panel Least Squares Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 DETERMINANTS COEFFICIENT STD. ERROR T-STATISTICS PROB. SR -3.772 1.532 -2.462 0.018 AT -24.784 7.253 -3.417 0.001 LASSET 0.447 0.155 2.878 0.006 FP 4.932 9.653 0.512 0.612 ER -2.250 1.054 -2.135 0.038 FEE 1.637 1.427 1.144 0.258 CONSTANT -1.456 4.251 -0.343 0.734 EFFECTS SPECIFICATIONS CROSS-SECTION FIXED (DUMMY VARIABLES) PERIOD FIXED (DUMMY VARIABLES) ADJUSTIFIED R-SQUARED 0.438 MEAN.DEP BAR 4.051 S.E OF REGRESSION 9.639 S.D. DEP BAR 12.859 SUM SQUARED RESID 3810.045 SCHWARZ CRITERION 8.418 LONG LIKELIHOOD -221.580 F-STAT. 3.227 DURBINà ¢Ã¢â€š ¬Ã¢â‚¬Å"WATSON STAT 1.896 PROB F-STAT 0.000 In table 4 and 5, we use the CROSS SECTION MODEL (cross section random effects cross section weights), according to both of these methods the calculations are same, the coefficient values and the significant are same. The assets turnover is showing the negative value which shows according to it that the more assets turnover can impact the growth of the mutual funds and the value is significant in both methods as well as in the fixed effect model. The value of the sharp ratio means the return of the mutual fund is showing coefficient negative in the random effect method that means that the increase of the return value can effect the growth negatively and growth is less when this return value is high while the value is significant which means it is good for the growth of the mutual fund and same value is showing in the fixed effect method. But in the cross section weights method the value of the return is positive and it is not significant there. So it shows here a that the higher return impact the mutual fund growth positively means higher the return higher the growth of the mutual fund nut it is nit the case here. Family proportion of the mutual funds according to the both methods says that the results are showing positive relationship in the growth of the funds and the higher the family proportion. The values are significant according to the probability measures. Expense ratio according to both of these models reflects the results that expense ratio is impacting the growth of the funds negatively. Means as the ratio of the expense increase the growth is going to be less for the mutual funds. The coefficient value of the expense ratio is in negative value and the value in both the methods shows that this is significant. As far as the Management fee is concerned here so according to the both methods the management fee is impacting on the growth inversely. The coefficient value in both the cases is negative means if the management fee is charged by th e mutual fund management so the growth is less than if they dont charge the management fee. And the value is significant in both the methods. So it is clear from now that according to the Cross Section Model the impact of the management fee is negative on the growth of the mutual funds. The management who is charging the management fee their growth of the mutual funds is less and downward. TABLE NO. 4 Cross Section Weights Dependent Variable: GR Method: Panel EGLS (Cross Section Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 54 Cross-sections included: 13 Linear Estimation after One-Step Weighting Matrix VARIABLE COEFFICIENT STD.ERROR T-STAT PROB SR 0.439 0.825 0.532 0.596 AT -32.916 3.815 -8.628 0.000 FP 4.404 3.353 2.506 0.016 ER -2.032 0.719 -2.825 0.006 FEE -5.297 1.997 -2.665 0.010 LASSET 0.447 0.155 2.877 0.006 WEIGHTED STATISTICS R-SQUARED 0.788 MEAN DEPENDENT VAR 7.211 ADJ. R-SQRD 0.766 S.D. DEPENDENT VAR 20.513 S.E. OF REG 9.905 SUM SQUARED RESID 4709.255 DURBIN-WATSON STAT 1.785 UN-WEIGHTED STATISTICS R-SQUARED 0.396 MEAN DEPENDENT VAR 4.801 SUM SQUARED RESID 6164.67 DURBIN-WATSON STAT 1.521 TABLE NO. 5 Cross Section Random Effect Model Dependent Variable: GR Method: Panel EGLS (Cross-Section random Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 Swamy and Arora estimator of component variances VARIABLE COEFFICIENT STD.ERROR T-STAT PROB CONSTANT 1.663 2.777 0.599 0.551 SR -1.435 0.972 -1.876 0.952 AT -29.005 5.104 -5.682 0.000 FP 13.775 6.468 2.129 0.037 ER -2.021 0.866 -2.134 0.023 FEE -3.497 2.877 -1.217 0.228 EFFECTS SPECIFICATIONS S.D RHO CROSS SECTION RANDON 3.045 0.096 IDIOSYNCRATIC 9.345 0.904 WEIGHTED STATISTICS R-SQUARED 0.432 MEAN DEPENDENT VAR 3.287 ADJ. R-SQRD 0.384 S.D. DEPENDENT VAR 12.429 S.E. OF REG 9.758 SUM SQUARED RESID 5522.350 F-STATISTICS 8.844 DURBIN-WATSON STAT 1.533 PROB (F-STAT) 0.000 UN-WEIGHTED STATISTICS R-SQUARED 0.416 MEAN DEPENDENT VAR 4.051 SUM SQUARED RESID 6076.710 DURBIN-WATSON STAT 1.432 So these are the results from the use of the two different models for the testing of the variables and the impact of the determinants on the growth of the mutual funds. As far as the results are concern so it is clear that in most on the factors like the assets turn over, expense ratio, family proportion and assets the results are same in both the methods. But the concern is from the sharp ratio means the returns on the funds is some little bit difference. According to both the methods the results are same for the return but in the cross section model in which two methods were drawn and only the sharp ratio returns are varying there. In management fee the results are totally different for both of the cases. For the confirmation of the results, all the outcomes and the results are in accordance with the study of Mr. Richard J. Dowen, Thomas Mann (2007). CONCLUSION The basic duty of the management of any firm and the company is to maximize the business and the wealth of the share holders as well as the sustainability of the owners of the company. The management of the mutual funds is charging the management fee for this purpose. The management fee according to them is for the efficient control of the management for the growth of the mutual fund. The study of this article reveals the working and the growth regarding the mutual funds family. The growth of the mutual fund which we examine here is based on the determinants which are effecting the growth of the funds family. According to the result the mutual fund growth is dependant on the negative and the positive impacts of these determinants. We work through two models for the measurement of growth which are fixed effect model and the cross section model. Let us conclude here that most of the results draw by these models is same except of some factors which are the basic theme of this study. The impact of the asset turnover, expense ratio and the return on the investment which is calculated through the sharp ratio has a negative impact on the growth of the mutual funds. It is clear that the increases in the value of these factors cause the less growth of the funds and effect downward the growth of the mutual funds. Whether the factor of the family proportion is impacting and effecting positively on the growth of the mutual funds. As the value or the ratio of the family proportion increases it shows the sign that the growth of the mutual funds increase. Now finally the impact of the mutual fund management fee towards the growth of the mutual fund that to which extent this fee contribute in the growth of the mutual fund. According to the both models, the management fee is resulting differently. In the cross section model the management fee is impacting negatively which is the constraint of this study. Management fee is charging by the funds management is contributing less in the growth. So the cross section model shows that as more and high the fee is charged by the management the less will be the growth of the mutual funds. Secondly the fixed effect model reflects the result that the management fee is contributing to the much growth of the mutual funds as promised by their management advisors. It reflect that the management who is charging the much fee showing and keeping the mutual fund firm towards the high growth of the fund. In the end, the hypothesis results are drawn which were design for the checking of the performance of the fund. As per the calculation of the results the first hypothesis is rejected because the return of the mutual funds is different for the funds that charge the fee and th at not charging the fee. So the first hypothesis is rejected. The second hypothesis is also rejected that the risk adjusted return is same for the funds that charging the fee and on the growth of the funds. Because fro the both models it is clear that the risk adjusted return calculated from the sharp ratio is effecting negatively on the growth of the funds. If return is high so the chances of the less growth is higher. If return is less so chances of the growth is much growth is higher. The third hypothesis is also rejected because the expense ratio can effect the growth of the mutual fund. If the ratio is higher so the growth will be lesser and if the ratio is less the growth of the funds will move towards upwards. According to calculations and from the results of both models, expense ratio has positive impact on the growth of the funds. Lesser the ratio higher will be growth of the mutual funds. Finally the last hypothesis, by applying two models namely cross section model and fixed effect model. As per the results of fixed effects model the value is significant which shows that the funds which charging the fee has higher growth rate and performing well. So the hypothesis will be accepted from fixed effects model. Results of the cross section model reflect that the value is insignificant and growth is effected by management fee. If the management charges fee then their growth will be effected negatively. So from cross section model hypothesis will be rejected.

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Washington organized an effective approach of gradualism among blacks but was disrupted by militant leaders like W.E.B. Dubois. After reconstruction, the hopes for full citizenship rights were broken when the government renewed white supremacist control to the South. The government adopted a laissez faire policy, and the Jim Crow laws brought social, occupation, and educational discrimination to the American Negro. In 1896, the Supreme Court’s decision in Plessy v. Ferguson strengthened the segregation of public facilities in the South. Some leaders supported violence, some urged a return to Africa, and most encouraged peaceful means to change the conditions. Some supported a fight for civil rights, especially the right to vote and others wanted blacks to become skilled workers. These two approaches are called the economic strategy and the political strategy. Washington supported the gradualist economic strategy. He wanted whites to agree to black progress in agriculture, education, and economics. He believed that African Americans should be able to have some jobs and get some education but did not believe complete equality was a practical goal. African Americans should work hard for a job, not have it handed to them. Agriculture was one of the most important aspects to his idea of racial uplift. He supported education in farming and industrial skills, crafts, and development of enterprise, patience, and thrift. He believed they would receive respect from whites and gain

Disliking Books free essay sample

â€Å"Disliking Books† is excerpted from the book â€Å"Beyond the Culture Wars: How Teaching the Conflicts Can Revitalize American Education† published in 1993. Graff wrote this article to make teachers aware of the difficult experience of growing up from a non-bookish person, even afraid of serious literary to an intellectual person. The article encourages teachers help students read critics. Students can benefit from critics become literary people and enjoy reading literature. Gerald Graff came from a Jewish middle-class family. His father was an intellectual person. Mr. Graff was disappointed because his son didn’t read literature. Graff knows what it is like to not understand literary works. While most people think reading comments from critics will contaminate the article because students may read with prejudice and not be able to think about article itself. In his article â€Å"Disliking Books†, Gerald Graff argues that reading critics will help shape their mind to a literary sensibility. We will write a custom essay sample on Disliking Books or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page In Graff’s personal experience, critics didn’t ruin the excitement of literature. Instead, critics inspired him to think more deeply about the book and relate it to modern life. In college, he fought for his degree and read some books. Deep-down he felt these books were boring and tasteless. Gerald Graff had no interest in serious books before he got to college. But everything changed. When he read â€Å"The Adventure of Huckleberry Finn† by Mark Twain and the critics’ debate about the end of the novel, his interest was awakened, he reread this novel with surprise and passion. One of the critics implied Twain was cheating at the end of book. Graff thought cheating was a thing that usually happened to students; he never thought a famous author would make a mistake that even undergraduate students could demonstrate. Through this experience, he found the critics’ debate at the end novel was quite interesting. He became one of the critics, attended debate. His interest was aroused: catch literature â€Å"bug†. In this article, Graff claims that critics for him, are a necessary part of the path in beginning an intellectual person. If he did not read and participate in critics’ debate, his vocation would not be found. Critics helped sprout his interest in serious literature. He was a nonintellectual person who feared literature and even resisted talking like an intellectual. For him it was hard to find resonance in reading. Before he read and participate critics’ debate, he thought the story happened so long ago; it had nothing to do with him. For him, the story was â€Å"dead†. But the debate he made was like having a conversation with author and made story alive; so when the story happened didn’t matter anymore. Reading critics made him feel enthusiasm about books. He read books with passion and expectation. Graff insists that compared with just thinking about the reading. To read well, one must able to talk well about what you read; to talk well, you must learn literary language and ongoing critical debates, to read well and talk well about books can help you be an intellectual person. Instead of stumbling blocks, critics are stepping stones to help you become an intellectual person.

Socrates Was A Great Philosopher Who Lived In Greece. Socrates Was The

Socrates was a great philosopher who lived in Greece. Socrates was the first of, the great trio of ancient Greece Socrates, Plato, and Aristotle, (Encyclopedia Britannica, volume 27). Socrates was born in Athens, Greece in about 470 BC. His father was Sophroniscus, a sculptor, and his mother was Phaenarete. Socrates followed in his fathers footsteps for a while as a sculptor. He designed a statue group of the three graces, which stood at the entrance to the Acropolis until the second century AD. Socrates had a fairly bad appearance. He was stout and not very tall, with prominent eyes, a snub nose, broad nostrils, and a wide mouth (Moulton, Ancient Greece and Rome). Socrates was married late in life to Xanthippe. He had three sons Lamprocles, Sophroniscus, and Menexenus. During the Peloponesian war against Sparta, Socrates bravely served as a hoplite (a heavily armed infantry soldier). He fought in the battles of Potidaea (432-430 BC) where he saved the life of Alcibiades, the battle of Delium (424 BC), and the battle of Amphipolis (422 BC). Socrates liked to argue and debate anything with anyone. He spent most of his time in public places, like the marketplace, arguing with anyone that listened. He enjoyed life immensely and achieved social popularity because of his ready wit and a keen sense of humor that was completely devoid of satire or cynicism (Encarta Encyclopedia 1999). Socrates did not write any books nor did he establish any schools of philosophy. He criticized Athenian education and the teaching ways of the Sophists. Sophists taught things by having the students memorize facts. Socrates thought that if a student asked questions then they would learn better. Socrates did not want to be called a Sophist; instead he was called a philosopher. The basis of his teaching was the concepts of justice, love, and virtue. He believed that no person is willingly bad and that virtue is knowledge and those who know the right will act rightly. This type of thinking was called the Socratic method. One of Socrates pupils was Plato, who in turn taught Aristotle. Through the writings of these philosophers, Socrates profoundly affected the entire subsequent course of Western speculative thought (Encarta 99). Socrates also taught Anisthenes, who founded the Cynic school of philosophy, and Aristippus who founded the Cyrenaic school of hedonism. Socrates criticized democracy. He thought that it wasnt smart to elect unskilled people as rulers. After all, we do not elect doctors or ship pilots why should we elect rulers? he said. Socrates drew crowds when he mocked the government. Through his teaching and actions he made many enemies in the government. Socrates was arrested in 399 BC for impiety. At his trial the prosecutor Meletus said he was neglecting the gods of the state and introducing new ones (this was because Socrates believed in a mystical inner voice called the daemonion), and corrupting the morals of the young, leading them away from the principals of democracy. Socrates was convicted by a vote of 280 to 220, and Meletus asked for the death penalty, and the jury concurred by a small margin. Socrates, according to Athenian legal practice, was supposed to make a counter-proposition, which he did only for forms sake. He suggested a fine of one mina but raised it to thirty because his friends told him to. This further angered the jury, which voted to sentence him to death by an even wider margin. The customary procedure of execution was to drink a poison made from the bark of the hemlock tree. This was supposed to be done within 24 hours but there was an unexpected delay of a month. During his prison stay his friends frequently visited Socrates. One friend, Crito, proposed an escape plan, but Socrates refused. He decided that the verdict had been given fairly and he would go through with the sentence. Socrates drank the hemlock and died in 399 BC. Socrates still influences the way we think today. Socrates thought that to be really happy, people had to find perfection in their souls, and the better that their souls were then the happier they were. He also thought that people should think about what they think about and why. Many of