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Purchase and redemption decisions of mutual fund investors and the role of fund families

Author

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  • Jank, Stephan
  • Wedow, Michael

Abstract

This paper investigates the purchases and redemptions of a large cross-sectional sample of German equity funds. We find that investors punish bad performance by selling their shares, but also have a tendency to sell winners. Investors in large fund families show higher sales and redemption rates. Further family size also affects the flow-performance relationship: Investors in large families punish bad performance more. Last, we find that inner family rankings play an important part for redemptions, with investors strongly redeeming their shares from intra-family losers.

Suggested Citation

  • Jank, Stephan & Wedow, Michael, 2010. "Purchase and redemption decisions of mutual fund investors and the role of fund families," CFR Working Papers 10-13, University of Cologne, Centre for Financial Research (CFR).
  • Handle: RePEc:zbw:cfrwps:1013
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    File URL: https://www.econstor.eu/bitstream/10419/41376/1/637049357.pdf
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    Cited by:

    1. Dötz, Niko & Weth, Mark, 2013. "Cash holdings of German open-end equity funds: Does ownership matter?," Discussion Papers 47/2013, Deutsche Bundesbank.
    2. repec:eee:jomega:v:71:y:2017:i:c:p:114-128 is not listed on IDEAS
    3. Shinozawa, Yoshikatsu & Vivian, Andrew, 2015. "Determinants of money flows into investment trusts in Japan," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 37(C), pages 138-161.
    4. Nan-Yu Wang & Sen-Sung Chen & Chih-Jen Huang & Cheng-Hsin Yen, 2014. "Purchase and Redemption Decisions of Mutual Fund Investors of Variable Life Insurance-Using Quantile Regression," International Journal of Economics and Financial Issues, Econjournals, vol. 4(4), pages 714-725.
    5. repec:eco:journ1:2014-03-03 is not listed on IDEAS

    More about this item

    Keywords

    Mutual Funds; Fund Family; Flow-Performance Relationship;

    JEL classification:

    • 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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