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O efeito de smart money nos fundos de investimento: o caso português [The smart money effect in mutual funds: the Portuguese case]

Author

Listed:
  • Júlio Lobão

    (Universidade do Porto)

Abstract

In this article we analyze the investors' ability to select mutual funds, a phenomenon that is known as the smart money effect. The sample used concerns funds domiciled in Portugal for the 2003-2011 period. The empirical evidence suggests that investors had good skills when selecting mutual funds. When the market is in an upward (downward) phase, investors have the ability to select the funds in which to invest (disinvest) but they do not show the ability to choose the best funds to sell (buy). The intensity of the smart money effect seems also to depend on fund category and on the size of the funds.

Suggested Citation

  • Júlio Lobão, 2017. "O efeito de smart money nos fundos de investimento: o caso português [The smart money effect in mutual funds: the Portuguese case]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 27(1), pages 241-270, January-A.
    • Handle: RePEc:nov:artigo:v:27:y:2017:i:1:p:241-270
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    More about this item

    Keywords

    smart money effect; mutual funds; financial markets efficiency; Portugal;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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