Objective: Iranian MUTUAL FUNDs’,average turnover rate stood at 330% in the years from 2001 to 2007. Such a high rate could lead to excessive trading costs for investors without necessarily bringing in high returns. The goal of this paper is to estimate TRANSACTION costs and examine their effect on the performance of the FUNDs. Methods: In addition to the explicit costs of trading such as TRANSACTION taxes and commissions, there are other, implicit, components such as bid-ask spread and price impact which are harder to compute and less recognized by investors. This paper used high frequency (tick-by-tick) trade and limit order book data, as well as the hand-collected quarterly holding and trading data for a sample of Iranian equity MUTUAL FUNDs to estimate the aforementioned trading costs. Then, the effect of trading costs on the risk-adjusted FUND returns was examined using the fourfactor alpha as our proxy. Results: FUNDs understudy spend on average 11% of their AUM annually on trading costs which is a considerable amount in comparison to their return (15. 6%), during the sample period. The present study found no significant effect of trading costs on the FUNDs’,performance in the sample. However, during the subperiod of 2013-2014, a negative and significant relationship was discovered between them. Conclusion: As the obtained results of the present study proved, more trading activities of the Iranian FUND managers’,do not lead to higher returns,accordingly a high trading volume generates only enough excess return to offset the associated TRANSACTIONs costs.

MUTUAL FUNDs were first established in Iran in 2007 under Securities Market Act 2005 and have since grown significantly to one of the most important capital market intermediaries. Hence understanding and evaluating the performance of these FUNDs are critical to both investors and FUND managers. This research aims to examine the effects of various MUTUAL FUND attributes and characteristics, namely past performance, size, expenses RATIO, turnover RATIO, number of FUNDs under FUND manager’s management, and type of institution of FUND founder, on their current performance. For this purpose, a sample of 43 equity MUTUAL FUND was chosen and relevant weekly data for the period of 22th June to 22th September 2013 was collected. The results show that only past performance and the type of institution of founder have an impact on the MUTUAL FUND's performance.

Many performance measures, such as the classical Sharpe RATIO have difficulty in evaluating the performance of MUTUAL FUNDs whose return distributions are skewed. In this article, we examine the ability of the downside risk and the upside potential RATIO (UPR) in evaluating the skewed return distributions. We have used a sample of the active MUTUAL FUNDs in the Tehran Stock Exchange (TSE) for the period of 22- dec - 2010 To 22- dec - 2011. In order to make a fair comparison between the Sharpe RATIO and UPR, we assume that MAR in UPR plays the role of the risk-free rate in Sharpe RATIO. We constructed a ranking based on both criteria, and we find a very high correlation between the Sharpe RATIO and the UPR. This has seen to be the result of normal in the return distributions. Therefore, we prefer to use the UPR as an alternative to the Sharpe RATIO, as it gives a more adequate evaluation of the forecasting skills.

MUTUAL FUND persistence is well documented in the finance literature, but not well explained. The purpose of this paper is to examine the performance persistence of a large sample ofMUTUAL FUNDs over time. Specifically do MUTUAL FUND managers show positive (negative) performanceyear after year?Accordingly in light of random walk, strong form of efficiency can be tested through the study of the persistence in MUTUAL FUNDs performance. In this paper, the performance consistency for 62 MUTUAL FUNDs, from April 2008 to March 2014, is examined. Our findings indicate the strong form of efficiency from evidence Tehran Stock Exchange.

This research dealt with the survey of the relationship among the TRANSACTION activity RATIO and risk, return & portfolio diversification of MUTUAL FUNDs. the statistical population of this research consists of investment managers of MUTUAL FUNDs and a sample of investment managers of 37 MUTUAL FUNDs was investigated. Derived results from analyzing the data by Pearson correlation and SPSS software show that between the TRANSACTION activity RATIO of MUTUAL FUNDs and risk, return, portfolio diversification, there is a meaningful direct relation, meaningful reverse relation, meaningful reverse relation, respectively.The results show that TRANSACTION activity RATIO in men investment managers, less experienced, less educated and younger ones is more than women, more experienced, highly educated and older ones.One of the findings of this research is the survey of relationship between MUTUAL FUNDs portfolio diversification RATIO and TRANSACTION activity RATIO of MUTUAL FUNDs which is done for the first time in Iran.