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Mutual Fund Growth in Standard and Specialist Market Segments

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Author Info
Stefan Ruenzi (Dpeartment of Finance, University of Cologne)

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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://129.3.20.41/eps/fin/papers/0406/0406005.pdf
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Publisher 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://129.3.20.41

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

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Find related papers by JEL classification:
G23 - Financial Economics - - Financial Institutions and Services - - - Pension Funds; Other Private Financial Institutions

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References listed on IDEAS
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    Other versions:
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    Other versions:
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    Other versions:
  16. Brown, Stephen J & Goetzmann, William N, 1995. " Performance Persistence," Journal of Finance, American Finance Association, vol. 50(2), pages 679-98, June. [Downloadable!] (restricted)
    Other versions:
  17. Ippolito, Richard A, 1992. "Consumer Reaction to Measures of Poor Quality: Evidence from the Mutual Fund Industry," Journal of Law & Economics, University of Chicago Press, vol. 35(1), pages 45-70, April.
  18. Alexander Kempf & Stefan Ruenzi, 2004. "Family Matters: The Performance Flow Relationship in the Mutual Fund Industry," Finance 0404012, EconWPA, revised 26 May 2004. [Downloadable!]
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