Genetic Algorithm Applied On The
Performance Appraisal System Of Mutual
Fund Managers In Taiwan
Author(s)
J.-F. Chang & B.-Y. Liao
Abstract
This research studies the performance appraisal system of mutual fund managers
in Taiwan. 147 mutual fund managers were investigated in examining the
performance appraisal system of mutual fund managers. This article describes
using a Genetic Algorithm to evaluate the optimal performance in appraising
mutual fund managers in the asymmetric information market in Taiwan. The
optimum performance using this method of evaluation can be used to promote
the performance of mutual fund managers. It also could enhance the developing
of fund markets. From the research, the four most important results concluded
are as follows: fund managers prefer to be evaluated annually, the optimal
reward timing is quarterly, performance reward is the best way to encourage
employees, and the career life for mutual fund managers is from 5 to 10 years.
Keywords: performance appraisal, mutual fund managers, genetic algorithm.
1 Introduction
Mutual funds are legal entities, which are regulated by the Securities and
Exchange Commission under the investment company Act of 1940 (the Act). In
particular, the disinterested directors must be independent of the fund’s
investment advisor, principal underwriter, and broker [Act, section 10(a)]. The
mutual funds managed are important for investors in many countries. The typical
growth fund manager has great latitude in the types of stocks held, the timing of
purchases and sales, the fund diversification, the industry concentration of the
J.-F. Chang & B.-Y. Liao 2
Keywords
performance appraisal, mutual fund managers, genetic algorithm.
Related Book
Other papers in this volume
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