Liquidity risk and the performance of UK mutual funds

We examine the role of liquidity risk, both as a stock characteristic as well as systematic liquidity risk, in UK mutual fund performance for the first time. Using four alternative measures of stock liquidity we extract principal components across stocks in order to construct systematic or market liquidity factors. We find that on average UK mutual funds are tilted towards liquid stocks (except for small stock funds as might be expected) but that, counter-intuitively, liquidity as a stock characteristic is positively priced in the cross-section of fund performance. We find that systematic liquidity risk is positively priced in the cross-section of fund performance. Overall, our results reveal a strong role for stock liquidity level and systematic liquidity risk in fund performance evaluation models.

A planar reconfigurable linear rigid-body motion linkage with two operation modes

A planar reconfigurable linear (also rectilinear) rigid-body motion linkage (RLRBML) with two operation modes, that is, linear rigid-body motion mode and lockup mode, is presented using only R (revolute) joints. The RLRBML does not require disassembly and external intervention to implement multi-task requirements. It is created via combining a Robert’s linkage and a double parallelogram linkage (with equal lengths of rocker links) arranged in parallel, which can convert a limited circular motion to a linear rigid-body motion without any reference guide way. This linear rigid-body motion is achieved since the double parallelogram linkage can guarantee the translation of the motion stage, and Robert’s linkage ensures the approximate straight line motion of its pivot joint connecting to the double parallelogram linkage. This novel RLRBML is under the linear rigid-body motion mode if the four rocker links in the double parallelogram linkage are not parallel. The motion stage is in the lockup mode if all of the four rocker links in the double parallelogram linkage are kept parallel in a tilted position (but the inner/outer two rocker links are still parallel). In the lockup mode, the motion stage of the RLRBML is prohibited from moving even under power off, but the double parallelogram linkage is still moveable for its own rotation application. It is noted that further RLRBMLs can be obtained from the above RLRBML by replacing Robert’s linkage with any other straight line motion linkage (such as Watt’s linkage). Additionally, a compact RLRBML and two single-mode linear rigid-body motion linkages are presented.