Analysis and prediction of disappearance of Turkish type A mutual funds

Aims of this study are to examine the survivorship bias of Turkish type A mutual funds and toexamine the effect of performance on mutual funds? disapperance. A sample uniqly developedby the researcher covers the period January 2000 till December 2004 and includes bothdefunct and live mutual funds. Survivorship bias is examined by comparing returns betweenlive funds and all funds that are the combination of live and defunct funds. The effect ofperformance on mutual funds? disappearance is examined by using a binomial logit model.Major findings of this study are as follows. The survivorship bias of Turkish type A mutualfunds are high. The examination of fund disappearance in the logit model indicates that funds?disapperance depends significantly upon funds? contemporary performance, new fund flowand asset size. In addition, total shocks seem to be related with funds? disappearance.Key words: Mutual funds, survivorship bias, disappearance, logit model.