Retail fund flows and performance: Insights from supervisory data

Martin Hodula, Milan Szabo and Josef Bajzik

Emerging Markets Review, 2024, vol. 59, issue C

Abstract: This paper explores inflows and outflows patterns in retail equity mutual funds related to past and future performance derived from detailed monthly security-level holdings of funds in the Czech Republic. We find that retail investors become sensitive to bad performance in times of aggregate illiquidity and while investing in funds that hold more illiquid assets. Moreover, we document that when facing illiquidity and deteriorating performance, under-performing equity investing funds experience lower investor purchases and a larger share of redemption requests. We observe similar investor behaviour in periods when retail investors face constraints on their disposable income.

Keywords: Equity funds; Retail investors; Liquidity; Smart money; Disposable income (search for similar items in EconPapers)
JEL-codes: G11 G23 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Retail Fund Flows and Performance: Insights from Supervisory Data (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:59:y:2024:i:c:s1566014124000062

DOI: 10.1016/j.ememar.2024.101111

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