Performance evaluation of actively managed and passively managed mutual funds

The number of investors is increasing with the development of the mutual fund market in Turkey as in the international markets in recent years. Some of these investors are investing in funds managed with an actively portfolio strategy in order to gain more than market returns. However, in order to anticipate the price movements in asset portfolio management, important researches are required and this leads to high costs. Those who advocate passively investment strategy argue that trying to beat the market will not be an effective investment strategy. In the literature, there are many studies related to mutual funds, but empirical studies that reveal, which of the active or passive management methods are superior, are rare. This study conducts the performance evaluation of actively managed mutual funds and passively managed mutual funds by using the 500 daily data between the periods of 01.10.2013 and 30.08.2015. As a result of the assessments conducted using performance criteria based on systematic risk and total risk, it is found that actively managed mutual funds, which try to beat the market by exposing significant risks and costs, has mostly low performance compared to passively managed mutual funds.