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The Bank Bias: Segmentation of French Fund Families

Author

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  • Jondeau, E.
  • Rockinger, M.

Abstract

In this paper, we investigate the performance-growth relation of French mutual funds. Using panel techniques, we find that capital inflows to French past top performing funds are not as strong as expected. This result suggests that there exist barriers to investment, that may come from the fact that funds are mostly managed by banks and insurance companies and that there are high switching costs for an investor to transfer cash from one financial institution to another. We call this phenomenon ''bank bias'', because investors do not diversify enough across banks' funds. Furthermore, we provide a test of our conjecture and cannot reject it.

Suggested Citation

  • Jondeau, E. & Rockinger, M., 2004. "The Bank Bias: Segmentation of French Fund Families," Working papers 107, Banque de France.
    • Handle: RePEc:bfr:banfra:107
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Raphaëlle Bellando & Linh Tran-Dieu, 2011. "La relation entre flux d'entrées nets et performance des fonds. Une étude appliquée au cas des opcvm actions français," Revue économique, Presses de Sciences-Po, vol. 62(2), pages 255-275.
    3. Coudert, Virginie & Salakhova, Dilyara, 2020. "Do mutual fund flows affect the French corporate bond market?," Economic Modelling, Elsevier, vol. 87(C), pages 496-510.
    4. Raphaëlle Bellando, 2008. "Le conflit d'agence dans la gestion déléguée de portefeuille : une revue de littérature," Revue d'économie politique, Dalloz, vol. 118(3), pages 317-339.

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    More about this item

    Keywords

    Mutual funds ; Performance ; SICAV ; FCP;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • 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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