The simultaneous relation between fund flows and returns/ created by Karen L. Benson, Robert W. Faff and Tom Smith

By:

Benson, Karen [author]

Contributor(s):

Material type: Text

TextSeries: Australian journal of management ; Volume 35, number 1Los Angeles: Sage, 2010Content type:

text

Media type:

unmediated

Carrier type:

volume

ISSN:

03128962

Subject(s):

Investment fund -- Capital income -- Multiple equation model -- United States

LOC classification:

HD31 AUS

Online resources:

Click here to access online

Abstract: We assess the simultaneous relation between fund flows and fund returns and show that current month flows and returns play a key role in understanding the flow/performance linkage. Current returns have a positive impact on current flows, suggesting that investors react quickly to performance information. However, current flows do not universally impact current returns. Notably, the pursuit of fund flows in large funds and established funds results in negative return impacts, yet it is these returns that drive investor decisions. Investors in institutional funds are able to identify high/low return funds and react in the current period resulting in an apparent positive impact of flows on returns.

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Holdings
Item type	Current library	Call number	Vol info	Status	Notes	Date due	Barcode
Journal Article	Main Library Journal Article	HD31 AUS (Browse shelf(Opens below))	Vol. 35, no.1 (pages 51-68)	Not for loan	For in house use only

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We assess the simultaneous relation between fund flows and fund returns and show that current month flows and returns play a key role in understanding the flow/performance linkage. Current returns have a positive impact on current flows, suggesting that investors react quickly to performance information. However, current flows do not universally impact current returns. Notably, the pursuit of fund flows in large funds and established funds results in negative return impacts, yet it is these returns that drive investor decisions. Investors in institutional funds are able to identify high/low return funds and react in the current period resulting in an apparent positive impact of flows on returns.

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