—Due to Tax-benefit from Thai government’s regulation, most of investors are interested in Thai mutual funds. Thus, it brings the important question that which is the right indicator or method to help investors making decision? Based on their knowledge? This paper studies popular methods that unsophisticated and sophisticated investors always use, which are Morningstar rating, and flow-performance sensitivity respectively. This paper examines, and monitors for 36 Thai “star” funds from 2003 to 2007 by using fama-french model. The result suggests that there is a positive relationship between funds’ sensitivity and Morningstar rating. Thus, even sophisticated or unsophisticated investors use different method in investment decision making, they will go to the same direction. In addition, this paper proofs that after funds receive as high performance star as five-star. Their performances drop, mainly from fund size.
—Mutual Fund performance, mutual fund rating, Morningstar mutual fund, investor decision making, fama-french model
Chollaya Chotivetthamrong is with the National Institute of Development Administration, Bangkok, Thailand (e-mail: email@example.com).
Cite: Chollaya Chotivetthamrong, "The Performance of Thai Mutual Funds: A 5-Star Morningstar Mutual Fund Rating," Journal of Economics, Business and Management vol. 3, no. 1, pp. 104-110, 2015.