The Number of Portfolio Holdings and Performance of Actively Managed Mutual Funds

This study tests for a quadratic relation between number of holdings and performance for open-end mutual funds. Based on previous literature and practical portfolio management constraints, a quadratic relation is hypothesized. If confirmed, this would suggest an optimal number of holdings. The results show the hypothesized quadratic relation for fixed income funds, but not for other asset classes. The findings hold for both large and small-scale funds.

Publication Details

Journal
Scholars Archive - University at Albany (University at Albany, State University of New York)
Published
2025-05-01
Primary Topic
Quantum Information and Cryptography
Type
article
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article

The Number of Portfolio Holdings and Performance of Actively Managed Mutual Funds

Scholars Archive - University at Albany (University at Albany, State University of New York)
Quantum Information and Cryptography
article

The Number of Portfolio Holdings and Performance of Actively Managed Mutual Funds

article en

Abstract

This study tests for a quadratic relation between number of holdings and performance for open-end mutual funds. Based on previous literature and practical portfolio management constraints, a quadratic relation is hypothesized. If confirmed, this would suggest an optimal number of holdings. The results show the hypothesized quadratic relation for fixed income funds, but not for other asset classes. The findings hold for both large and small-scale funds.

Scholars Archive - University at Albany (University at Albany, State University of New York)
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Openalex Percentile: Top 72%
Quantum Information and Cryptography
Open Access PDFOpenAlex
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The Number of Portfolio Holdings and Performance of Actively Managed Mutual Funds · Scholars Archive - University at Albany (University at Albany, State University of New York) (2025) | TGRS Research Map | TGRS