Work

Do active Chinese equity fund managers produce positive alpha? A comprehensive performance evaluation

Year: 2026

Type: article

Abstract: We examine the performance of actively managed Chinese mutual Funds over the period 2002-2020. Using the bootstrap-based false discovery technique, we find that 19.25% of Chinese actively managed mutual funds produce positive-alpha, which contrasts with existing studies documented by others in developed markets. Our findings survive a battery of robustness tests. Unlike in developed markets, equilibrium accounting may not hold in China as the Chinese stock market is dominated by retail investors instead of mutual funds, and thus the mutual funds in China can be more skilled at the expense of the retail investors. We find supportive evidence of the applicability of the bootstrap-based false discovery rate method by conducting simulations.

Source: Journal of International Financial Markets Institutions and Money

DOI: 10.1016/j.intfin.2026.102312

Authors: Tingting Cheng, Shuo Xing, Cheng Yan, Keith Pilbeam

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,930

Funders: National Natural Science Foundation of China, Nankai University, Fundamental Research Funds for the Central Universities, Fundamental Research Funds for Central Universities of the Central South University

Awards: G2307065348, G3087847198, G6677078062, G7518710704