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Financial Funds, Risk and Investment Strategies
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Financial Funds, Risk and Investment Strategies

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: 31 January 2027 | Viewed by 53416

Editor

Dr. Mirela Cătălina Tűrkeş

E-Mail Website
Guest Editor
Faculty of Marketing, Bucharest University of Economic Studies, 010374 Bucharest, Romania
Interests: sustainable entrepreneurship; environmental responsibility; sustainable growth; sustainable practice; sustainability-oriented innovation of SMEs; innovation factors for SMEs; corporate social responsibility and SMEs; sustainability orientation; supply chain sustainability; and SME performance
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

In the economic field, over the past 40 years, making investments in various financial markets has generated annual returns of over 10%. Given the global market forecasts regarding the growth in investment volumes and returns in the context of digital technology integration and climate change, it becomes imperative to understand how an investor can begin their journey in a financial market by adopting an investment strategy that is highly useful for protection against imbalances such as inflation and/or improving performance over a minimum period of 5 years. Financial policy and investment strategy guide the investor in constructing an investment portfolio based on individual abilities, desired profits, and the balance between risk and return. The investor, using economic indicators, statistical information about the industry, and historical accounting and sales data, can create a financial forecast regarding the size of financial results over a certain period. To prevent potential financial risks such as credit, liquidity, and operational risks, the investor, whether they are an individual or a legal entity, must seek professional assistance to obtain financial reports that will allow them to make the best business decisions. A fund represents the financing or resource, in the form of money or other assets, that the investor uses to carry out an investment project. The specialized literature groups investment funds into three main categories: hedge, mutual, and sovereign wealth funds. According to the European legislation, based on their characteristics, investment funds are divided into open-ended (UCITS) and close-ended funds (AIFs and non-UCITS). Regardless of their typology, funds, financial risks, and investment strategies are important research topics because they significantly influence financial market stability, efficient resource allocation, and the ability to manage economic uncertainties. Understanding these concepts is essential for optimizing investment performance and developing robust economic policies that support sustainable growth.

Dr. Mirela Cătălina Tűrkeş
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-anonymized peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • investment strategies
  • financial funds
  • hedge funds
  • mutual funds
  • sovereign wealth funds
  • risk management
  • financial markets
  • digital technology integration
  • climate change impact
  • inflation protection
  • portfolio construction
  • credit risk
  • liquidity risk
  • operational risk
  • sustainable growth strategies

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Published Papers (7 papers)

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Research

22 pages, 328 KB  
Article
The Impact of Accounting Conservatism on Investment Efficiency and Cost of Capital: Evidence from Non-Financial Listed Firms in Saudi Arabia
by Fahad Alrobai
J. Risk Financ. Manag. 2026, 19(8), 565; https://doi.org/10.3390/jrfm19080565 - 31 Jul 2026
Viewed by 303
Abstract
Purpose: This research aims to examine the impact of accounting conservatism on investment efficiency and the cost of capital within the Saudi Arabian corporate context following the implementation of Saudi Vision 2030. Methodology: This study analyzes panel data from 105 non-financial listed firms [...] Read more.
Purpose: This research aims to examine the impact of accounting conservatism on investment efficiency and the cost of capital within the Saudi Arabian corporate context following the implementation of Saudi Vision 2030. Methodology: This study analyzes panel data from 105 non-financial listed firms on the Saudi Stock Exchange (Tadawul) from 2016 to 2024. To fulfill the structural requirements for measuring investment efficiency, the sample is restricted to sectors containing a minimum of 10 firms. The empirical framework relies on four robust Ordinary Least Squares (OLS) econometric models to evaluate the hypothesized relationships. Findings: The empirical findings indicate two primary results. First, accounting conservatism exerts a significant positive impact on investment efficiency. Second, statistical tests reveal that accounting conservatism has a nuanced, asymmetric, and non-linear impact on the components of the cost of capital—specifically, the weighted average cost of capital (WACC), cost of equity (COE), and cost of debt (COD)—when conditioned across three distinct regimes: the full sample, underinvesting firms, and overinvesting firms. These results challenge traditional linear assumptions, indicating that a state-contingent framework better explains market reactions to financial reporting strategies. Implications and Recommendations: The findings suggest that decision makers should abandon the assumption that maximizing accounting conservatism is a universally risk-averse or beneficial strategy. Instead, corporate managers should treat accounting conservatism as a strategic instrument governed by definite thresholds, as its impact on financing costs is deeply tied to a firm’s structural investment realities. Regulatory bodies and standard setters in the Saudi market are encouraged to integrate these non-linear insights when evaluating the capital market effects of financial transparency reforms. Full article
(This article belongs to the Special Issue Financial Funds, Risk and Investment Strategies)
29 pages, 841 KB  
Article
Carry Signals and Bond Returns in the Indonesian Government Bond Market
by Ahmad Syarif Munawi, Noer Azam Achsani, Roy Sembel and Dikky Indrawan
J. Risk Financ. Manag. 2026, 19(7), 469; https://doi.org/10.3390/jrfm19070469 - 26 Jun 2026
Viewed by 495
Abstract
Carry strategies in developed markets are well studied, but their effectiveness in emerging government bond markets remains less well understood. This study analyzes cross-curve carry strategies in the Indonesian government bond market from June 2009 to June 2025. The findings indicate that a [...] Read more.
Carry strategies in developed markets are well studied, but their effectiveness in emerging government bond markets remains less well understood. This study analyzes cross-curve carry strategies in the Indonesian government bond market from June 2009 to June 2025. The findings indicate that a term spread-based carry long–short portfolio delivers positive returns and exhibits persistence across rolling 10-year horizons throughout the sample period. However, performance tends to weaken during episodes of local currency depreciation. Duration-matched long-only carry portfolios also outperform the market benchmark after transaction costs, indicating practical value for investors. Overall, the findings suggest that carry strategies can be effective in the Indonesian government bond market and that the term spread-based carry measure provides a more robust signal than the alternative specification that incorporates roll-down effects. Full article
(This article belongs to the Special Issue Financial Funds, Risk and Investment Strategies)
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25 pages, 1131 KB  
Article
The Performance Comparison Between Time-Series and Cross-Sectional Momentum Strategies in Taiwan Stock Market
by Hung-Hsi Huang, Yi-Ru Pan and Ching-Ping Wang
J. Risk Financ. Manag. 2026, 19(7), 462; https://doi.org/10.3390/jrfm19070462 - 25 Jun 2026
Viewed by 830
Abstract
This study compares the performance of time-series (TS) and cross-sectional (CS) momentum strategies in the Taiwan stock market from January 1993 to December 2025. Using a sample of 1169 listed and delisted firms, we construct five TS and five CS momentum strategies across [...] Read more.
This study compares the performance of time-series (TS) and cross-sectional (CS) momentum strategies in the Taiwan stock market from January 1993 to December 2025. Using a sample of 1169 listed and delisted firms, we construct five TS and five CS momentum strategies across multiple lookback and holding periods, resulting in 80 TS and 80 CS strategy specifications. Strategy performance is evaluated using annualized average excess returns (AERs), certainty equivalent returns (CERs), CAPM alphas, and Fama–French three-factor (FF3) alphas. The results show that volatility-scaled strategies significantly outperform conventional momentum strategies. On average, TS strategies generate higher returns and superior risk-adjusted performance than CS strategies. Decomposition analysis indicates that momentum profits are primarily driven by long positions, while short positions become more important during market crash periods. Overall, the findings highlight the importance of volatility management in enhancing momentum profitability in the Taiwan stock market. Full article
(This article belongs to the Special Issue Financial Funds, Risk and Investment Strategies)
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11 pages, 203 KB  
Article
Investment Performance of University Endowments
by Kwoloong T. Liaw
J. Risk Financ. Manag. 2026, 19(6), 383; https://doi.org/10.3390/jrfm19060383 - 25 May 2026
Viewed by 1115
Abstract
University endowments provide long-term support for academic activities. Universities rely on the investment returns of endowments to continuously fund these activities. To pursue better investment performance, university endowments of all sizes have adopted the endowment model, which reduces holdings of public securities and [...] Read more.
University endowments provide long-term support for academic activities. Universities rely on the investment returns of endowments to continuously fund these activities. To pursue better investment performance, university endowments of all sizes have adopted the endowment model, which reduces holdings of public securities and increases allocation to alternative assets such as hedge funds, private equity, commodities, and real estate. This study documents the trend toward increasing allocation to alternative assets and evaluates the investment performance. Large university endowment funds have allocated a higher portion to alternatives and have higher rates of returns. Conversely, smaller university endowments have increased a lower percentage to alternatives and their performance trails that of larger peers, supporting prior studies showing that smaller endowments would achieve better performance by adopting the conventional 60/40 allocation in equity and fixed income strategy. We perform a regression analysis to examine the link between asset allocation and investment performance. The empirical results show that the impacts of equities and alternatives on performance are positive and significant. Furthermore, a comparative analysis indicates that investment returns exhibit high year-to-year volatility while the spending rates are stable and that the average rate of return is higher than the average spending rate. Full article
(This article belongs to the Special Issue Financial Funds, Risk and Investment Strategies)
60 pages, 5577 KB  
Article
Performance of Pairs Trading Strategies Based on Various Copula Methods
by Yufei Sun
J. Risk Financ. Manag. 2025, 18(9), 506; https://doi.org/10.3390/jrfm18090506 - 12 Sep 2025
Cited by 2 | Viewed by 6071
Abstract
This study evaluates three pairs trading strategies—the distance method (DM), mispricing index (MPI) copula, and mixed copula—across the Chinese equity market from 2005 to 2024, incorporating time-varying transaction costs. To enhance computational efficiency, a novel two-step methodology is proposed that first selects candidate [...] Read more.
This study evaluates three pairs trading strategies—the distance method (DM), mispricing index (MPI) copula, and mixed copula—across the Chinese equity market from 2005 to 2024, incorporating time-varying transaction costs. To enhance computational efficiency, a novel two-step methodology is proposed that first selects candidate pairs based on the sum of squared differences and then applies copula models to capture nonlinear and asymmetric dependence structures between stocks. Pre-cost monthly excess returns are 84, 30, and 25 basis points, respectively, dropping to 81, 23, and 15 basis points post-costs. While the DM consistently delivers higher returns, copula strategies offer advantages in stability and resilience, especially in volatile markets. The Student-t copula proves particularly effective in capturing dependence structures with fat tails and asymmetric correlations. Although copula methods face challenges such as unconverged trades—instances where spreads fail to revert within the trading horizon—they nonetheless highlight the diversification and risk mitigation potential of advanced dependence-based approaches. Enhancing trade convergence and controlling downside risk could further improve copula strategy performance. Overall, the results highlight the diversification and risk mitigation potential of advanced copula-based pairs trading models under dynamic market conditions. Full article
(This article belongs to the Special Issue Financial Funds, Risk and Investment Strategies)
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23 pages, 382 KB  
Article
The Influence of Liquidity Risk on Financial Performance: A Study of the UK’s Largest Commercial Banks
by Ahmed Eltweri, Nedal Sawan, Krayyem Al-Hajaya and Zineb Badri
J. Risk Financ. Manag. 2024, 17(12), 580; https://doi.org/10.3390/jrfm17120580 - 23 Dec 2024
Cited by 18 | Viewed by 20351
Abstract
The Basel III regulations turned the banking industry around worldwide and created new challenges for banks’ financial stability, particularly in liquidity management. As the demand for compliance with the rules started to grow, the inability of banks worldwide to meet the Basel III [...] Read more.
The Basel III regulations turned the banking industry around worldwide and created new challenges for banks’ financial stability, particularly in liquidity management. As the demand for compliance with the rules started to grow, the inability of banks worldwide to meet the Basel III requirements about liquidity shifted the way they work. This paper highlights the complex relationship between liquidity and bank profitability in the post-Basel III era. Based on market presence and influence, 10 publicly traded UK commercial banks were selected for 2015–2021. Panel data, using FGLS regression models, were tested to elaborate in detail how the liquidity risk indicators determine banks’ performance, as measured by different profitability indicators. The findings were diversified: some showed that the relationship between liquidity risk indicators and bank profitability is contingent upon the interaction of several dimensions that range from the internal aspects of the banks themselves to general macroeconomic factors. This study provides vital insights into the current literature on risk management, especially about liquidity risks and their effect on bank performance. The findings of this study contribute meaningfully to the knowledge base for banks, regulators, and policymakers. This will contribute to better decision-making, financial stability, and long-term development within the UK’s banking industry. Full article
(This article belongs to the Special Issue Financial Funds, Risk and Investment Strategies)
16 pages, 947 KB  
Article
The Impact of Rebalancing Strategies on ETF Portfolio Performance
by Attila Bányai, Tibor Tatay, Gergő Thalmeiner and László Pataki
J. Risk Financ. Manag. 2024, 17(12), 533; https://doi.org/10.3390/jrfm17120533 - 24 Nov 2024
Cited by 4 | Viewed by 23124
Abstract
This research explores the efficacy of rebalancing strategies in a diversified portfolio constructed exclusively with exchange-traded funds (ETFs). We selected five ETF types: short-term U.S. Treasury bonds, U.S. equities, global commodities, U.S. real estate investment trusts (REITs), and a multi-strategy hedge fund. Using [...] Read more.
This research explores the efficacy of rebalancing strategies in a diversified portfolio constructed exclusively with exchange-traded funds (ETFs). We selected five ETF types: short-term U.S. Treasury bonds, U.S. equities, global commodities, U.S. real estate investment trusts (REITs), and a multi-strategy hedge fund. Using a 10-year historical period, we applied a unique simulation model to generate random portfolios with varying asset weights and rebalancing tolerance bands, assessing the impact of rebalancing premiums on portfolio performance. Our study reveals a significant positive correlation (r = 0.6492, p < 0.001) between rebalancing-weighted returns and the Sharpe ratio, indicating that effective rebalancing enhances risk-adjusted returns. Support vector regression (SVR) analysis shows that rebalancing premiums have diverse effects. Specifically, equities and commodities benefit from rebalancing with improved risk-adjusted returns, while bonds and REITs demonstrate a negative relationship, suggesting that rebalancing might be less effective or even detrimental for these assets. Our findings also indicate that negative portfolio rebalancing returns combined with positive rebalancing-weighted returns yield the highest average Sharpe ratio of 0.4328, highlighting a distinct and reciprocal relationship between rebalancing effects at the asset and portfolio levels. This research highlights that while rebalancing can enhance portfolio performance, its effectiveness varies by asset class and market conditions. Full article
(This article belongs to the Special Issue Financial Funds, Risk and Investment Strategies)
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