Profitability of Sector Mutual Funds and ETFs during Market Development
Profitability of Sector Mutual Funds and ETFs during Market Development

Author(s): Martin Širůček, Jan Vystoupil, Petr Strejček
Subject(s): Business Economy / Management, Health and medicine and law, Financial Markets, ICT Information and Communications Technologies
Published by: Masarykova univerzita nakladatelství
Keywords: ETF; mutual fund; Sharpe ratio; standard deviation; tracking error;
Summary/Abstract: Paper is focused on the profitability of investment into IT, finance, healthcare and consumer goods oriented active and passive mutual funds and ETFs and its profit/loss on growing, stagnant and decreasing market. Attention is also focused on purpose to set a recommendation for investors what instrument bring higher return/lower loss on growing or decreasing market and if investor can expect different results according to the sector orientation, like what sector is more sensitive on bullish or bearish trend. Our result show that ETF nor passive mutual funds wasn´t able to beat the market, where sector index brings in all situations better results than these investments. On bearish trend all sector ETFs and passive mutual funds bring same results as sector index, better results bring only active managed mutual funds. The lowest loss during this period brings healthcare active managed mutual funds. On bullish/stagnant market was pretty the situation the same, but on the growing market passive funds and ETF are more profitable than active mutual funds.

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