Mutual fund flows: Where does the money go?

Licheng Cai Harlan Platt (), Licheng Cai () and Marjorie Platt
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Licheng Cai Harlan Platt: Northeastern University, Boston
Licheng Cai: Currensee Global Inc, Boston
Marjorie Platt: Northeastern University, Boston

Journal of Economic and Financial Studies (JEFS), 2014, vol. 2, issue 5, 59-69

Abstract: We examine three broad mutual fund sectors: equities, fixed income, and money market funds, to ascertain whether fund flows explain investment returns or whether investment returns attract funds. This question has been studied before but for the most part, research results have not been intuitive. Our findings are substantially different from the results of previous studies. We believe that our results are intuitively more obvious. We fail to reject both causal hypotheses. That is, we find that investment returns are affected by funds flows and that funds flows towards high returns.

Keywords: Lagged returns; Mutual fund return; Sectoral allocation (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:lrc:lareco:v:2:y:2014:i:5:p:59-69

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