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Mutual Fund Growth in Standard and Specialist Market Segments

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  • Stefan Ruenzi

    (Dpeartment of Finance, University of Cologne)

Abstract

We examine differences in the performance flow relationship (PFR) between different segments of the fund industry. Such differences can be caused by distinct mutual fund investors’ characteristics in different segments. In our empirical study of the US equity mutual fund industry in 1993-2001, we find a much more convex PFR in standard segments than in specialist segments. Furthermore, our results suggest that investors in the latter are more fee- and risk-aware than investors in standard segments. Overall, these results hint at investors in specialist segments being more sophisticated than investors in standard segments. Our results should have serious implications for the management of investment companies and for the behavior of fund managers.

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File URL: http://128.118.178.162/eps/fin/papers/0406/0406005.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Finance with number 0406005.

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Length: 23 pages
Date of creation: 14 Jun 2004
Date of revision: 27 Jun 2004
Handle: RePEc:wpa:wuwpfi:0406005

Note: Type of Document - pdf; pages: 23
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Web page: http://128.118.178.162

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Keywords: Mutual Funds; Performance Flow Relationship; Fund Growth; Investor Sophistication;

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Cited by:
  1. Jacquelyn Humphrey & Darren Lee, 2011. "Australian Socially Responsible Funds: Performance, Risk and Screening Intensity," Journal of Business Ethics, Springer, vol. 102(4), pages 519-535, September.
  2. 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.

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