European investment fund flows and financial stability

Elias Bengtsson
Additional contact information
Elias Bengtsson: Sveriges Riksbank

Journal of Asset Management, 2009, vol. 10, issue 5, No 3, 293-304

Abstract: Abstract Using a unique data set on quarterly European net fund flows combined with stock market data drawn from publicly available sources, this article seeks to determine whether stock market performance influences investment fund flows and whether fund flows affect stock market performance. Given that the absolute bulk of research on this issue is based on US data, the data enable an investigation into the relationship between fund flows and stock markets in a completely new institutional context. Our findings cannot confirm that fund flows impact subsequent returns or that return affects future flows. Therefore, our findings indicate that investment fund flows do not seem to contribute financial instability by inflating or deflating stock market prices. However, the data demonstrate both contemporaneous and lagged correlation between fund flows and stock market returns. We also find some (statistically insignificant) indications of price pressure effects on global stock market returns, and noise trading and investor sentiment effects on European stock market returns.

Keywords: investment fund flows; stock markets; investors (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/jam.2009.30 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:assmgt:v:10:y:2009:i:5:d:10.1057_jam.2009.30

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41260

DOI: 10.1057/jam.2009.30

Access Statistics for this article

Journal of Asset Management is currently edited by Marielle de Jong and Dan diBartolomeo

More articles in Journal of Asset Management from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().