Investor behavior in the mutual fund industry: evidence from gross flows

Cashman, George D.; Nardari, Federico; Deli, Daniel Newton; Villupuram, Sriram V.

doi:10.1007/s12197-012-9231-1

Cited by 51 publications

(40 citation statements)

References 38 publications

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“…Among others, Ivković and Weisbenner [1] find that "old money" punishes poor performance as much as it awards good performance, but "new money" flows into both poorly performing and well performing funds, thereby disguising the punishment and amplifying the award on an aggregate net flow level. Similar results are documented in studies by Ivković and Weisbenner [2], Shrider [11], Cashman et al [15,16]. An important reason for these steady new-money flows to poorly performing funds could be the growing popularity of mutual fund-based savings and retirement plans (e.g., Cohen and Schmidt [17]; Holden and Van Derhei [18]; Goda et al [19]) which, once chosen, are difficult to change.…”

Section: Int J Financial Stud 2015 3supporting

confidence: 76%

The Relation between Past Flows and Future Performance: Simple Investment Strategies in the Mutual Fund Sector

Rohleder

2011

SSRN Journal

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Section: Int J Financial Stud 2015 3supporting

confidence: 76%

The Relation between Past Flows and Future Performance: Simple Investment Strategies in the Mutual Fund Sector

Rohleder

2011

SSRN Journal

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“…Interestingly, we find that international funds receive more money and that the number of countries that a fund is distributed in also enhances its flows. To control for autocorrelation in fund flows, we include lagged flows in columns (3), (7), and (11), and, like Cashman et al (2007), we find that this variable enhances explanatory power. In columns (4), (8), and (12), we add fund-level SMB and HML loadings plus average country flows as control variables.…”

Section: Measuring Worldwide Convexitymentioning

confidence: 86%

The flow-performance relationship around the world

Ferreira

Keswani²,

Miguel

et al. 2012

Journal of Banking & Finance

228

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We use a new dataset to study how mutual fund flows depend on past performance across 28 countries. We show that there are marked differences in the flow-performance relationship across countries, suggesting that U.S. findings concerning its shape do not apply universally. We find that mutual fund investors sell losers more and buy winners less in more developed countries. This is because investors in more developed countries are more sophisticated and face lower costs of participating in the mutual fund industry. Higher country-level convexity is positively associated with higher levels of risk taking by fund managers. JEL Classification: G15; G23

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“…Namely, as noted in Cashman et al [9], flows to funds are persistent by themselves. That means that inflows to the funds are showing persistency-positive inflows are followed by new inflows and vice versa-outflows are more likely to be followed by new outflows.…”

Section: Refinements Of the Modelmentioning

confidence: 87%

The Relation between Performance and Flows of Mutual Funds: Case of the Croatian Fund Market

Brborovic¹,

Posedel²

2014

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With pre 2008 euphoria and present depression, inflows to open investment funds and outflows from it shaped general market conditions on the Croatian fund market. This article studies the relationship between performance of open ended investment funds and inflows (outflows) to them on Croatian funds data in an environment without long fund data history, with small number of funds and relatively illiquid underlying equity market. The results suggest that the driving forces behind funds' flows encompass the combined influence of present month fund's performance and persistency of past performances. At the end of our analysis we test the significance of the introduced explanatory variables on the data sets that include data for each particular fund. The significance of the introduced explanatory variables varies among different funds, although a general level of the explanatory power is maintained on average.

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Investor behavior in the mutual fund industry: evidence from gross flows

Cited by 51 publications

References 38 publications

The Relation between Past Flows and Future Performance: Simple Investment Strategies in the Mutual Fund Sector

The Relation between Past Flows and Future Performance: Simple Investment Strategies in the Mutual Fund Sector

The flow-performance relationship around the world

The Relation between Performance and Flows of Mutual Funds: Case of the Croatian Fund Market

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