Foundation Award for Research

Dr. Edward Chang

Dr. C. Edward Chang

Finance and General Business
College of Business

I. Focus of Research

My primary areas of research include performance evaluation of mutual funds, exchange-traded funds, and closed-end funds, as well as index investing, style investing, sustainable investing, and economic moat investing. My research philosophy is to investigate investment vehicles and styles that can offer practical and useful insights for my own investments and for fellow investors. I am very interested in investigating unexplored or underexplored investment products such as fundamental index funds, target date funds, and 529 college savings plans.
Many of my research projects have been motivated by a skepticism of investment fads.  For example, enhanced index funds do not enhance returns, but only expense ratios. I have done considerable work on socially responsible investing, finding that self-proclaimed socially responsible funds (SPSRFs) do not materially differ from non-SPSRFs in terms of their sustainability measures or return performance. Additionally, I discovered that about twenty percent of SPSRFs aren’t even average with respect to their social responsibility profile. I find that low-cost mutual funds, independently rated as highly sustainable, offer an effective way to implement both the values and financial priorities of socially-conscious investors. My research has consistently confirmed that costs matter.

II. Major Projects

  • "Effective Socially Responsible Investing: Self-Proclamation, Sustainability Rating and Cost," 2019.

  • “Intelligent Selection of Smart Beta Mutual Funds," 2019.

  • “Maximizing College Savings through the Selection of Low-Cost 529 Plan Portfolios," 2018.

  • “The Impact of Costs on Recent Target Date Fund Performance," 2017.

  • “How Good Are Consumer Reports' Recommendations of Mutual Funds?" 2013.

  • “Do Green Mutual Funds Perform Well?" 2012.

III. Future Directions of Research

  • "Does moat investing work in U.S. mutual funds?”
  • “The Relative Importance of Sustainability Measures and Costs in Mutual Fund Selection”
  • “Impact of Expense Ratio and Load Charge on Historical, Anticipated and Relative Performance of Mutual Funds”

IV. Topics related to your research and of interest to the broad University Community, for which you are available for presentations and/or consultations.

  • "The role of expenses in socially responsible equity mutual fund selection"
  • “529 Plan Investment Advice: Focusing on Equity Concentration and Fees"
  • “The Impact of Costs on Recent Target Date Fund Performance"
  • “Do Fundamental Index Funds Outperform Traditional Index Funds?”