The Effect of Cash holding on the Performance (return) of Joint Investment Funds

Abstract

Joint investment funds are specialized financial entities that invest by deposited cashes from investors in various portfolio of securities. Against, investment units assign their investments to them. The goal of the study is to identify the relationship between cash holding and the performance of joint investment funds. 23 joint investment funds were studied from 2010 to 2015. The hypotheses were analyzed using multiple regression models and sectional regression model. Testing first hypothesis of the research indicated that there is a significant and reverse relationship between cash maintenance and the performance of joint investment funds. It means that the amount of cash held in the fund is more; the performance of fund is lower. Also, the results of the research indicated that there is not a negative significant relationship between surplus cash and the performance of investment funds. According to the results, it is recommended lack of surplus cash maintenance by joint investment funds and appropriate usage of managers of these funds from following investment opportunities.