Literature Review Example in Finance

A study was conducted by Arugaslan, Ed and Ajay (2007) to evaluate the risk-adjusted performance of US mutual funds. Study employed a sample of 20 largest US-based mutual funds for the period 1995-2004. Study used Quarterly returns for computing the measures of return and risk. Modigliani and Modigliani (M Square) and Sortino Ratio are used to evaluate the performance. Study identified the performance evaluation over a five-year (2000-2004) and ten-year (1995-2004) investment horizon. The authors concluded that funds with the highest returns faced higher risk due to which funds lose attractiveness.

Literature Review on Mutual Funds

A study was conducted by Grinblatt and Titman (1989) to examine the superior stock selection abilities of mutual fund managers through which researcher generated abnormal returns. For this purpose a sample of 274 funds was taken from 1974 to1984. Study applied Jensen Measure and compared the abnormal returns of active and passive investment strategies both with and without transaction costs, fees, and expenses. The results showed that the actual returns of these funds do not exhibit abnormal performance indicating that investors cannot take advantage of the superior abilities of these portfolio managers by purchasing shares in the mutual funds.