Resumen

ROMACHO, João. Competition and performance in the management of equity mutual funds: The Portuguese case. Rev. Portuguesa e Brasileira de Gestão [online]. 2010, vol.9, n.1-2, pp.39-48. ISSN 1645-4464.

The purpose of this article is to analyse the level of competition in the portfolio management industry in Portugal, as well as to evaluate the performance of investment portfolios. Additionally, we intend to assess the relationship between these two dimensions of competition and performance in the industry. In order to accomplish these goals, we apply the Brown, Harlow and Starks (1996) model to identify the possible competition behaviour of mutual funds and the Treynor and Mazuy (1966) model to evaluate fund performance. The results obtained suggest that domestic mutual funds do exhibit some competition behaviour, unlike European Union and international funds. Besides, in general funds exhibit poor performance, both in terms of selectivity and timing abilities. Even so, the performance of domestic funds is slightly better . Furthermore, this category of funds tends to show superior performance in scenarios assuming absence of competition, through some specialization in selectivity.

Palabras clave : Mutual Funds; Performance; Competition; Selectivity; Timing.

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