A Study on Risk and Return of Mutual Fund Investment Approaches：Comparison among Dollar-Cost Averaging, Dollar-Value Averaging and Lump-Sum Investing

• Main Authors: Chuang, Li-Hui, 莊麗蕙
• Other Authors: Chen, Dar-Hsin
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/9wauj8

碩士 === 國立臺北大學 === 國際財務金融碩士在職專班 === 102 === ABSTRACT A STUDY ON RISK AND RETURN OF MUTUAL FUND INVESTMENT APPROACHES：COMPARISON AMONG DOLLAR-COST AVERAGING, DOLLAR-VALUE AVERAGING AND LUMP-SUM INVESTING by CHUANG, LI-HUI June 2014 ADVISOR(S)：DR. CHEN, DAR-HSIN DEPARTMENT：EXECUTIVE MASTER OF BUSINESS ADMINISTRATION IN INTERNATIONAL FINANCE MAJOR：INTERNATIONAL FINANCE DEGREE：MASTER OF BUSINESS ADMINISTRATION Since that people in Taiwan confront various economic problems such as cease moving of salary, price increases for house rapidly, aging population and so on. To manage finances for people become a necessary option for gaining more income. Based on this concern, the investment of mutual fund has popularly become one of finances tools to increase the income. Therefore this study tries to find the most efficient way of mutual fund investment for investors, by means of analyzes the risk and return of adopting Lump-Sum Investing, Dollar-Cost Averaging and Dollar-Value Averaging respectively. The 65 domestic general equity funds are selected to be target funds for this study, and these funds’ daily NAV sourced from Lipper system for the period from Jan. 2nd, 2004 to Dec. 31st, 2013 are also adopted to be cost basis. In order to avoid any deviation, the fund investments are assumed to plunge by moving backward day after day and calculate return for each investment accordingly. The main methodology of this research are One-Way ANOVA and t test for comparing the variance of investment return for the period of 1, 2, 3 and 5 years and for finding the suitable market trends. The analysis results are listed below: 1. The variances of investment return among Lump-Sum Investment, Dollar-Cost Averaging and Dollar-Value Averaging are obviously different for the investment period of 1, 2, 3, and 5 years. LS is the best one, DVA is the second and DCA is the worst in ranking. But LS is also the most risky one relatively. In additions, the evidences proof that these 3 methods could get more return if keep longer investment period. But there is only DVA keeps upward return while the investment period is extended to 5 years and the risk is also lower than the period of 1 year. 2. In declining market trend, both DVA and DCA present anti-fall nature. LS is in poor performance compared with DVA and DCA. While the market is in rising, correcting trend or the mixed trend including declining, rising and correcting trends, the return of LS is still the best one and DCA is the worst one in ranking. 3. LS should be suitable for aggressive investors who are able to stand for more risk. And for conservative investors, DVA or DCA should be the better choice for mutual fund investment. Key-words：Mutual Funds, Lump-Sum Investing, Dollar-Cost Averaging, Dollar-Value Averaging, One-Way ANOVA.