Name: M K Lodi & Navyasree S
Country: India

Year: 2026
Volume: Volume No: 13, Issue No: 1, Year: 2026
Page Number: 247-259
DOI: https://doi.org/10.5281/zenodo.19659835

ABSTRACT
The paper will focus on the association between managerial tenure and mutual fund
performance in the Indian capital market based on a cross sectional sample of 224 mutual funds, including 104 equity, 72 debt, and 48 hybrid funds, as of 31 December 2025. The analytical model incorporates Data Envelopment Analysis (DEA) to plot efficiency frontiers, and Ordinary Least Squares (OLS) regression to statistically assess tenure as a performance determinant with four investment horizons of 1-year, 3-year, 5-year and 10-year. The DEA results indicate that efficient fund frontiers in each of the three categories are mostly held by comparatively short-tenured managers. In particular, efficient equity funds, efficient debt funds, and efficient hybrid funds have managers with tenure greater than five years only 26.08, 41.17 and about 50 percent, respectively, of which is less than the traditional 50 percent standard of meaningful influence. The results of OLS regression support this observation: when we control alpha generation, portfolio composition, market capitalisation exposure, indicators of macroeconomic sensitivity (Macaulay duration, yield to maturity), and risk measures ( standard deviation, beta) managerial tenure is statistically irrelevant in all the twelve models. The fit of the models is good with the R-square of 0.50 to 0.98 and the structural drivers, especially alpha, allocation to mid-cap, and systemic risk are the most
significant determinants of fund returns. Collectively, these results dispute the common
industry discourse according to which managerial longevity is the same as performance superiority. The paper relies on the human capital theory and the principal-agent theory to put findings into context and provide realistic advice to retail investors, asset management firms, and regulators working in emerging market environments.

Keywords: Mutual Fund Performance / Managerial Tenure/ DEA/ OLS Regression/ Indian
Capital Markets