WIT Press


Genetic Algorithm Applied On The Performance Appraisal System Of Mutual Fund Managers In Taiwan

Price

Free (open access)

Paper DOI

10.2495/DATA040271

Volume

33

Pages

9

Published

2004

Size

283 kb

Author(s)

J.-F. Chang & B.-Y. Liao

Abstract

This research studies the performance appraisal system of mutual fund managers in Taiwan. 147 mutual fund managers were investigated in examining the performance appraisal system of mutual fund managers. This article describes using a Genetic Algorithm to evaluate the optimal performance in appraising mutual fund managers in the asymmetric information market in Taiwan. The optimum performance using this method of evaluation can be used to promote the performance of mutual fund managers. It also could enhance the developing of fund markets. From the research, the four most important results concluded are as follows: fund managers prefer to be evaluated annually, the optimal reward timing is quarterly, performance reward is the best way to encourage employees, and the career life for mutual fund managers is from 5 to 10 years. Keywords: performance appraisal, mutual fund managers, genetic algorithm. 1 Introduction Mutual funds are legal entities, which are regulated by the Securities and Exchange Commission under the investment company Act of 1940 (the Act). In particular, the disinterested directors must be independent of the fund’s investment advisor, principal underwriter, and broker [Act, section 10(a)]. The mutual funds managed are important for investors in many countries. The typical growth fund manager has great latitude in the types of stocks held, the timing of purchases and sales, the fund diversification, the industry concentration of the J.-F. Chang & B.-Y. Liao 2

Keywords

performance appraisal, mutual fund managers, genetic algorithm.