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Do fund flows moderate persistence? Evidence from a global study

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  • Antonio F. Miguel

Abstract

We investigate whether fund flows eliminate future abnormal performance and persistence as in Berk and Green (2004. “Mutual Fund Flows and Performance in Rational Markets.” Journal of Political Economy 112: 1269–1295) using a sample of open-end domestic equity mutual funds from 32 countries. We show that flows have only a small moderating effect on persistence even in the United States, where fund industry conditions most closely resemble the Berk and Green assumptions. In fact, we find that most countries do not have decreasing returns to scale in fund management and, as a result, flows have limited impact on mutual fund performance persistence.

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  • Antonio F. Miguel, 2021. "Do fund flows moderate persistence? Evidence from a global study," The European Journal of Finance, Taylor & Francis Journals, vol. 27(7), pages 635-654, May.
    • Handle: RePEc:taf:eurjfi:v:27:y:2021:i:7:p:635-654
    DOI: 10.1080/1351847X.2020.1830820
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    Cited by:

    1. Katarzyna Perez & £ukasz Szymczyk, 2022. "Actual rate of the management fee in mutual funds of different styles," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(4), pages 969-1014, December.
    2. Chen, Yihao & Miguel, Antonio F. & Liu, Xiayue, 2021. "Does mutual fund family size matter? International evidence," Journal of Multinational Financial Management, Elsevier, vol. 62(C).

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