ASSESSING THE PERFORMANCE OF EMERGING MARKET MUTUAL FUNDS IN CANADA

Emerging markets have received wide attention from investors around the globe because of their return potential and risk diversification. This research examines the selection and timing performance of Canadian mutual funds which invest in fixed-income and equity securities in emerging markets. We use (un)conditional two- and five-factor benchmark models that accommodate the dynamics of returns in emerging markets. We also adopt the cross-sectional bootstrap methodology to distinguish between ‘skill’ and ‘luck’ for individual funds. All the tests are conducted using a comprehensive data set of bond and equity emerging funds over the period of 1989-2011. The risk-adjusted measures of performance are estimated using the least squares method with the Newey-West adjustment for standard errors that are robust to conditional heteroskedasticity and autocorrelation. The performance statistics of the emerging funds before (after) management-related costs are insignificantly positive (significantly negative). They are sensitive to the chosen benchmark model and conditional information improves selection performance. The timing statistics are largely insignificant throughout the sample period and are not sensitive to the benchmark model. Evidence of timing and selecting abilities is obtained in a small number of funds which is not sensitive to the fees structure. We also find evidence that a majority of individual funds provide zero (very few provide positive) abnormal return before fees and a significantly negative return after fees. At the negative end of the tail of performance distribution, our resampling tests fail to reject the role of bad luck in the poor performance of funds and we conclude that most of them are merely ‘unlucky’.

The Influence of Attentional Focus on the Self-Efficacy-Performance Relationship in a Continuous Running Task

The self-efficacy-performance relationship in continuous sport tasks has been shown to be significantly reciprocal yet unequal with stronger influences in the performance-to-self-efficacy pathway rather than self-efficacy-to-performance pathway (e.g., LaForge-MacKenzie & Sullivan, 2014b). Bandura (2012) suggested that sociocognitive variables may influence this relationship. Attention as a sociocognitve factor may bias the processing of performance and self-efficacy information (Bandura, 1982, 1997; Bandura & Jourden, 1991). As confidence and attention are important aspects of peak running performance (Brewer, Van Raalte, Linder, & VanRaalte, 1991), the primary purpose of the present study was to examine the self-efficacy-performance relationship under three conditions of attentional focus. The secondary purpose was to examine self-efficacy and performance as separate constructs under the same conditions of attention. Participants ran continuously for one kilometer in one of three randomly assigned attentional focus conditions: internal-focus (n = 51), external-focus (n = 50), and control (n = 49). Self-efficacy was assessed using a one-item measure every 200 meters. Path analyses examining the primary objective revealed significant self-efficacy-to-performance pathways in all conditions: external-focus (p < .05, βs ranging from -.17 to -.32), internal-focus (p < .05, βs ranging from -.26 to -.36), and control (p < .05, βs ranging from -.29 to -.42). Significant reciprocal relationships were absent in all conditions. ANOVAs examining the secondary objectives found significantly faster performance in the control condition at the start (F (2, 147) = 3.86, p < .05) and end of the task (F (2, 147) = 3.56, p < .05). Self-efficacy was significantly higher in the internal-focus condition at the end of the task (Self-Efficacy 4 (F (2, 147) = 3.21, p < .05) and Self-Efficacy 5 (F (2, 147) = 4.74, p < .05). In contrast to previous within-trial research (e.g., LaForge-MacKenzie & Sullivan, 2014b) self-efficacy-to-performance effects were more significant and robust than performance-to-self-efficacy effects. These results provided support for Bandura’s (2012) suggestion that sociocognitive factors may have the ability to alter the causal structure of the self-efficacy-performance relationship, proposing complexities in the self-efficacy-performance relationship (Sitzmann &Yeo, 2013). Results were discussed from both theoretical and applied perspectives.

A domain-general perspective on medial frontal brain activity during performance monitoring

Activity of the medial frontal cortex (MFC) has been implicated in attention regulation and performance monitoring. The MFC is thought to generate several event-related potential (ERPs) components, known as medial frontal negativities (MFNs), that are elicited when a behavioural response becomes difficult to control (e.g., following an error or shifting from a frequently executed response). The functional significance of MFNs has traditionally been interpreted in the context of the paradigm used to elicit a specific response, such as errors. In a series of studies, we consider the functional similarity of multiple MFC brain responses by designing novel performance monitoring tasks and exploiting advanced methods for electroencephalography (EEG) signal processing and robust estimation statistics for hypothesis testing. In study 1, we designed a response cueing task and used Independent Component Analysis (ICA) to show that the latent factors describing a MFN to stimuli that cued the potential need to inhibit a response on upcoming trials also accounted for medial frontal brain responses that occurred when individuals made a mistake or inhibited an incorrect response. It was also found that increases in theta occurred to each of these task events, and that the effects were evident at the group level and in single cases. In study 2, we replicated our method of classifying MFC activity to cues in our response task and showed again, using additional tasks, that error commission, response inhibition, and, to a lesser extent, the processing of performance feedback all elicited similar changes across MFNs and theta power. In the final study, we converted our response cueing paradigm into a saccade cueing task in order to examine the oscillatory dynamics of response preparation. We found that, compared to easy pro-saccades, successfully preparing a difficult anti-saccadic response was characterized by an increase in MFC theta and the suppression of posterior alpha power prior to executing the eye movement. These findings align with a large body of literature on performance monitoring and ERPs, and indicate that MFNs, along with their signature in theta power, reflects the general process of controlling attention and adapting behaviour without the need to induce error commission, the inhibition of responses, or the presentation of negative feedback.