Mutual Fund Performance : Stock Selection or Market Timing

Abstract

The number of mutual fund investors in Indonesia as an emerging market in compared with the population of Indonesia is very small. In the United States, mutual funds have become part of a family, where in 10 families, 8 have invested in mutual funds. While in Indonesia is still needs more time to achieve that conditions. There is not many study about Investment Manager’s Stock Selection and Market Timing Ability in Indonesia. Good ability of investment managers, will influence the performance of mutual funds. This study aims to determine investment manager ability of the stock selection and market timing of equity funds in Indonesia,andthe most dominant factor affecting the performance of mutual funds in Indonesia..Data used is for period 1/1/2008 - 31/3 / 2011. This study will prove whether Manager Ability of Market Timing and Stock Selection is the most dominant variable in comparison with other variables associated with the performance of mutual funds in Indonesia. The findings of this studyare Stock selection ability is the main reason for investor to choose mutual fund. Market timing will use by investor as main reason for invest, in the future. The result of having a relation between stock selection, market timing ability and fund performance in an emerging market