Product Performance Satisfaction Level of Mutual Fund Investors

Asset allocation decisions of mutual fund investors

I extend the Warther (1995) evidence to show that stock market returns are related to contemporaneous flows into mutual funds that invest in risky stocks and bonds, but are unrelated to flows into funds that invest in safer stocks and bonds. I examine whether common sources of predictability in returns and flows can explain this contemporaneous relation. I find that variables with predictive ab...

Evaluating Mutual Fund Performance

We study standard mutual fund performance measures, using simulated funds whose characteristics mimic actual funds. We find that performance measures used in previous mutual fund research have little ability to detect economically large magnitudes ~e.g., three percent per year! of abnormal fund performance, particularly if a fund’s style characteristics differ from those of the value-weighted m...

Mutual Fund vs. Life Insurance: Behavioral Analysis of Retail Investors

During the post 1990 period, service sector in most of the Asian economies witnessed growth fueled by significant changes in their financial sector. India is now being ranked as one of the fastest growing economy of the world. During last one decade or so, role of Indian insurance and mutual fund industry as a significant financial service in financial market has really been noteworthy. In fact...

Managers, Investors, and Crises: Mutual Fund Strategies in Emerging Markets

Which Factors Matter to Investors? Evidence from Mutual Fund Flows

When assessing a fund manager’s skill, sophisticated investors will consider all factors (priced and unpriced) that explain cross-sectional variation in fund performance. We investigate which factors investors attend to by analyzing mutual fund flows as a function of recent returns. Investors attend most to market risk (beta), but treat returns attributable to size, value, momentum, and industr...