<abstract xmlns="http://www.w3.org/1999/xhtml">

<bold>Aim/purpose</bold> – The aim of this paper is to evaluate the efficiency of an investing in investment funds with different risk levels in times of a future life expectancy increase. For this purpose, it was analysed how future prices of the investment funds’ entities behave, depending on the window function and the age of the investors, in particular people of retirement age, for whom an investment income may be a supplementary way of raising additional capital.
<bold>Design/methodology/approach</bold> – Based on the historical data of the funds chosen from the different risk groups, a simulation of their price behaviour in the window function was carried out covering investor’s further life expectancy. Then, based on the result, the distribution of prices was analysed and the efficiency of investing in investment funds according to risk exposure was evaluated.
<bold>Findings</bold> – According to the conducted analyses, the funds with the lowest efficiency were share funds. The best funds, in terms of efficiency, were bond and money funds.
<bold>Research implications/limitations</bold> – The study was conducted on a limited number of funds, but this analysis can help take investment decisions.
<bold>Originality/value/contribution</bold> – In this study, the investment in investment funds is treated as a long-term project which expires after 25-30 years, and therefore it may be problematic to use standard methods of evaluation for the purpose of this paper. As a result, the NPV (Net Present Value) method was applied as a measure of the investment’s efficiency. In the literature, this approach to the evaluation of investment funds is unique.
</abstract>

Aim/purpose – The aim of this paper is to evaluate the efficiency of an investing in investment funds with different risk levels in times of a future life expectancy increase. For this purpose, it was analysed how future prices of the investment funds’ entities behave, depending on the window function and the age of the investors, in particular people of retirement age, for whom an investment income may be a supplementary way of raising additional capital.
Design/methodology/approach – Based on the historical data of the funds chosen from the different risk groups, a simulation of their price behaviour in the window function was carried out covering investor’s further life expectancy. Then, based on the result, the distribution of prices was analysed and the efficiency of investing in investment funds according to risk exposure was evaluated.
Findings – According to the conducted analyses, the funds with the lowest efficiency were share funds. The best funds, in terms of efficiency, were bond and money funds.
Research implications/limitations – The study was conducted on a limited number of funds, but this analysis can help take investment decisions.
Originality/value/contribution – In this study, the investment in investment funds is treated as a long-term project which expires after 25-30 years, and therefore it may be problematic to use standard methods of evaluation for the purpose of this paper. As a result, the NPV (Net Present Value) method was applied as a measure of the investment’s efficiency. In the literature, this approach to the evaluation of investment funds is unique.

The efficiency of an investing in investment funds in the context of a longevity

Department of Statistics and Operations Research, Faculty of Law, Administration and Economics

Journal of Economics and Management

This work is licensed under the Creative Commons Attribution-NonCommercial 4.0 International License.

{"article-title":"The efficiency of an investing in investment funds in the context of a longevity"}

Aim/purpose – The aim of this paper is to evaluate the efficiency of an investing in investment funds with different risk levels in times of a future life...

The efficiency of an investing in investment funds in the context of a longevity

Publié en ligne: 23 juil. 2021

Pages: 107 - 128

Reçu: 16 janv. 2019

Accepté: 04 sept. 2019

DOI: https://doi.org/10.22367/jem.2019.38.06

Mots clés
efficiency, longevity, investment funds, simulation methods

© 2019 Monika Mościbrodzka et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial 4.0 International License.

The efficiency of an investing in investment funds in the context of a longevity

Publié en ligne: 23 juil. 2021

Pages: 107 - 128

Reçu: 16 janv. 2019

Accepté: 04 sept. 2019

DOI: https://doi.org/10.22367/jem.2019.38.06

Mots clésefficiency, longevity, investment funds, simulation methods

© 2019 Monika Mościbrodzka et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial 4.0 International License.

Mots clés
efficiency, longevity, investment funds, simulation methods