IDEAS home Printed from https://ideas.repec.org/a/bla/eufman/v21y2015i5p867-904.html
   My bibliography  Save this article

The Lure of the Brand: Evidence from the European Mutual Fund Industry

Author

Listed:
  • Jan Jaap Hazenberg
  • Fabian Irek
  • Willem van der Scheer
  • Mariela Stefanova

Abstract

We investigate the effect of the fund family's brand on mutual fund flows by using a unique data set that represents a direct assessment of the brand image of European fund providers. A superior brand image increases the sensitivity of flows to good past performance, while it protects against outflows when there is underperformance. Flows of funds of independent providers have a higher sensitivity to past performance and brand image than flows of funds of providers owned by banks or insurers. These findings highlight the importance of marketing and brand in generating growth for the fund families.

Suggested Citation

  • Jan Jaap Hazenberg & Fabian Irek & Willem van der Scheer & Mariela Stefanova, 2015. "The Lure of the Brand: Evidence from the European Mutual Fund Industry," European Financial Management, European Financial Management Association, vol. 21(5), pages 867-904, November.
    • Handle: RePEc:bla:eufman:v:21:y:2015:i:5:p:867-904
    DOI: 10.1111/eufm.12046
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/eufm.12046
    Download Restriction: no
    File URL: https://libkey.io/10.1111/eufm.12046?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Roger Otten & Dennis Bams, 2002. "European Mutual Fund Performance," European Financial Management, European Financial Management Association, vol. 8(1), pages 75-101, March.
    2. Andreas Walter & Friedrich Moritz Weber, 2006. "Herding in the German Mutual Fund Industry," European Financial Management, European Financial Management Association, vol. 12(3), pages 375-406, June.
    3. Jeffrey J. Yankow & Thomas I. Smythe & Vance P. Lesseig & Michael A. Jones, 2011. "The Impact of Advertising on Fund Flows in Alternative Distribution Channels," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 2(1), pages 2-22, March.
    4. Chevalier, Judith & Ellison, Glenn, 1997. "Risk Taking by Mutual Funds as a Response to Incentives," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1167-1200, December.
    5. Spiegel, Matthew & Zhang, Hong, 2013. "Mutual fund risk and market share-adjusted fund flows," Journal of Financial Economics, Elsevier, vol. 108(2), pages 506-528.
    6. Venkatesh Shankar & Pablo Azar & Matthew Fuller, 2008. "—: A Multicategory Brand Equity Model and Its Application at Allstate," Marketing Science, INFORMS, vol. 27(4), pages 567-584, 07-08.
    7. Mitchell A. Petersen, 2009. "Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 435-480, January.
    8. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
    9. Guercio, Diane Del & Tkac, Paula A., 2008. "Star Power: The Effect of Monrningstar Ratings on Mutual Fund Flow," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 43(4), pages 907-936, December.
    10. Melissa B. Frye, 2001. "The Performance Of Bank-Managed Mutual Funds," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(3), pages 419-442, September.
    11. Carhart, Mark M, 1997. "On Persistence in Mutual Fund Performance," Journal of Finance, American Finance Association, vol. 52(1), pages 57-82, March.
    12. Vikram Nanda, 2004. "Family Values and the Star Phenomenon: Strategies of Mutual Fund Families," The Review of Financial Studies, Society for Financial Studies, vol. 17(3), pages 667-698.
    13. Erik R. Sirri & Peter Tufano, 1998. "Costly Search and Mutual Fund Flows," Journal of Finance, American Finance Association, vol. 53(5), pages 1589-1622, October.
    14. Prem C. Jain & Joanna Shuang Wu, 2000. "Truth in Mutual Fund Advertising: Evidence on Future Performance and Fund Flows," Journal of Finance, American Finance Association, vol. 55(2), pages 937-958, April.
    15. Brad M. Barber & Terrance Odean & Lu Zheng, 2005. "Out of Sight, Out of Mind: The Effects of Expenses on Mutual Fund Flows," The Journal of Business, University of Chicago Press, vol. 78(6), pages 2095-2120, November.
    16. Frye, Melissa B, 2001. "The Performance of Bank-Managed Mutual Funds," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(3), pages 419-442, Fall.
    17. Aneel Keswani & David Stolin, 2008. "Which Money Is Smart? Mutual Fund Buys and Sells of Individual and Institutional Investors," Journal of Finance, American Finance Association, vol. 63(1), pages 85-118, February.
    18. Jennifer Huang & Kelsey D. Wei & Hong Yan, 2007. "Participation Costs and the Sensitivity of Fund Flows to Past Performance," Journal of Finance, American Finance Association, vol. 62(3), pages 1273-1311, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jin, Liang & Taffler, Richard & Eshraghi, Arman & Tosun, Onur Kemal, 2020. "Fund manager conviction and investment performance," International Review of Financial Analysis, Elsevier, vol. 71(C).
    2. Arbaa, Ofer & Varon, Eva, 2019. "The performance and fund flows of name-change funds," Journal of Behavioral and Experimental Finance, Elsevier, vol. 22(C), pages 7-13.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabian Irek, & Jan Jaap Hazenberg & Willem van der Scheer & Mariela Stefanova, 2013. "The Lure of the Brand: Evidence from the European Mutual Fund Industry," LSF Research Working Paper Series 13-8, Luxembourg School of Finance, University of Luxembourg.
    2. Fabian Irek, & Jan Jaap Hazenberg & Willem van der Scheer, 2013. "The Lure of the Brand: Evidence from the European Mutual Fund Industry," DEM Discussion Paper Series 13-8, Department of Economics at the University of Luxembourg.
    3. Rakowski, David & Yamani, Ehab, 2021. "Endogeneity in the mutual fund flow–performance relationship: An instrumental variables solution," Journal of Empirical Finance, Elsevier, vol. 64(C), pages 247-271.
    4. Jennifer Huang & Kelsey D. Wei & Hong Yan, 2022. "Investor learning and mutual fund flows," Financial Management, Financial Management Association International, vol. 51(3), pages 739-765, September.
    5. Clemens Sialm & T. Mandy Tham, 2016. "Spillover Effects in Mutual Fund Companies," Management Science, INFORMS, vol. 62(5), pages 1472-1486, May.
    6. George J. Jiang & H. Zafer Yüksel, 2019. "Sentimental mutual fund flows," The Financial Review, Eastern Finance Association, vol. 54(4), pages 709-738, November.
    7. Ainulashikin Marzuki & Andrew C. Worthington, 2011. "Comparative fund flows for Malaysian Islamic and conventional domestic managed equity funds," Discussion Papers in Finance finance:201118, Griffith University, Department of Accounting, Finance and Economics.
    8. Florian Röder & Andreas Walter, 2019. "What Drives Investment Flows Into Social Trading Portfolios?," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 42(2), pages 383-411, July.
    9. Linh Tran Dieu, 2015. "A Comparison of Bank and Non-bank Funds in the French Market," Journal of Financial Services Research, Springer;Western Finance Association, vol. 47(3), pages 273-294, June.
    10. Shinozawa, Yoshikatsu & Vivian, Andrew, 2015. "Determinants of money flows into investment trusts in Japan," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 37(C), pages 138-161.
    11. Goriaev, Alexei & Nijman, Theo E. & Werker, Bas J.M., 2008. "Performance information dissemination in the mutual fund industry," Journal of Financial Markets, Elsevier, vol. 11(2), pages 144-159, May.
    12. Kaniel, Ron & Starks, Laura T & Gallaher, Steven, 2015. "Advertising and Mutual Funds: From Families to Individual Funds," CEPR Discussion Papers 10329, C.E.P.R. Discussion Papers.
    13. Chen, Hong-Yi & Chen, Hsuan-Chi & Lai, Christine W., 2021. "Internet search, fund flows, and fund performance," Journal of Banking & Finance, Elsevier, vol. 129(C).
    14. Gupta, Nilesh & Mishra, Anil V & Jacob, Joshy, 2022. "Prospect theory preferences and global mutual fund flows," Journal of International Money and Finance, Elsevier, vol. 125(C).
    15. Nanda, Vikram K. & Wang, Z. Jay & Zheng, Lu, 2009. "The ABCs of mutual funds: On the introduction of multiple share classes," Journal of Financial Intermediation, Elsevier, vol. 18(3), pages 329-361, July.
    16. Cuthbertson, Keith & Nitzsche, Dirk & O'Sullivan, Niall, 2016. "A review of behavioural and management effects in mutual fund performance," International Review of Financial Analysis, Elsevier, vol. 44(C), pages 162-176.
    17. Ayadi, Mohamed A. & Kryzanowski, Lawrence & Mohebshahedin, Mahmood, 2018. "Impact of sponsorship on fixed-income fund performance," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 121-137.
    18. Hung, Pi-Hsia & Lien, Donald & Kuo, Ming-Sin, 2020. "Window dressing in equity mutual funds," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 338-354.
    19. Linn K. Aasheim & António F. Miguel & Sofia B. Ramos, 2022. "Star rating, fund flows and performance predictability: evidence from Norway," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 36(1), pages 29-56, March.
    20. Yu, Hsin-Yi, 2012. "Where are the smart investors? New evidence of the smart money effect," Journal of Empirical Finance, Elsevier, vol. 19(1), pages 51-64.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:eufman:v:21:y:2015:i:5:p:867-904. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/efmaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.