EVALUATION OF THE RELATIONSHIP BETWEEN PERFORMANCE AND ADMINISTRATION RATE OF BRAZILIAN FUNDS

Abstract

The study aims at investigating the existence or not of the relation between the administration rate attributed to administrative institutions of investment funds and their performance (risk x return). The population of asset funds is represented by 127 investment funds of the IBOVESPA Asset type and 56 investment funds of the IBX Asset type. 82 funds belonging to the first group and 32 belonging to the second group were analyzed from this total. A bibliographical research was initially performed as methodological strategy, in addition to an empirical research (ex-post facto) in the selected sample. The analyses were made by using dispersion graphs and correlation calculations. As a conclusion, it can be verified that the correlation between the administration and the performance rate (represented by the Sharpe index) is weak with no evidence found to ascertain that funds which charge the highest administrative rates produce the best performances. As a compliment to the presented results, it can be verified that there are other variables that influence the performance of funds, hence making complementary investigations necessary.