Faculty-student research accepted for publication in financial academic journal
Radford University Associate Professor of Finance Abhay Kaushik’s research study, "Expense Ratios and Net Alphas of Large Cap Funds: Do Expenses Add Value?” has been accepted for publication in Financial Services Review.
The study analyzes the performance of large cap equity funds between January 2000 and December 2013.
Kaushik researched and wrote the paper with then undergraduate student Raymond Boisvert ‘15.
“The main objective of the research is to assess the performance as reflected in the alpha of funds conditioned on expenses,” Kaushik said. “We applied both OLS regression and ranked portfolio approaches to estimate the abnormal performance.”
Results of the study showed large cap funds underperform against benchmarks after incorporating expenses.
Kaushik’s and Boisvert’s journal article is scheduled to be published in the summer.
“I have published many papers so far, but this acceptance is special because I did this paper with an undergraduate student,” said Kaushik, who serves as a faculty adviser to the Student Managed Investment Portfolio Organization (SMIPO).
He said student research with a faculty member is “important partly because it is based on real data. It is not a hypothetical.”
Research opportunities with faculty, Kaushik said, prepare students for the industry. “It also helps them to understand the topic and expands their critical thinking ability.”
Kaushik has had three research articles previously published in Financial Services Review. The most recent, “Performance and Persistence of Performance of Healthcare Mutual Funds,” was in 2014 and co-authored with Radford University College of Business and Economics faculty members Lynn and Wayne Saubert.
Kaushik created a buzz in the financial community in 2013 when he published "Performance and Persistence of Performance of Actively Managed U.S. Funds that Invest in International Equity" in The Journal of Investing.
The article received "healthy discussion among portfolio managers and fund advisors," said Kaushik, who has been teaching at Radford University since 2007.