Do Past Performance and Past Cash Flows Explain Current Cash Flows into Retail Superannuation Funds in Australia?

Angela Frino, Richard Heaney and David Service
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Angela Frino: Faculty of Economics and Commerce, School of Finance and Applied Statistics, ANU, ACT, 0200.
Richard Heaney: School of Economics and Finance, Business, RMIT University, Level 12, 239 Bourke Street, Melbourne, VIC, 3000.
David Service: Faculty of Economics and Commerce, School of Finance and Applied Statistics, ANU, ACT, 0200.

Australian Journal of Management, 2005, vol. 30, issue 2, 229-244

Abstract: This paper examines the link between current-quarter cash flows and both past performance and past cash flows using a sample of Australian retail superannuation fund data (managed growth and managed stable) drawn from the period 1994 to 2000. This is a rapidly growing sector within the superannuation industry and it reflects investment behaviour of smaller investors rather than institutions and large corporations. Using both the Gruber (1996) approach and panel-data analysis we find a positive relationship between past performance and current-quarter cash flows as well as evidence of persistence in cash flows over time. Panel-data analysis also identifies a positive relationship between current net cash flows and past performance and cash inflows as well as a negative relationship between current net cash flows and past outflows. Market-wide growth in the retail superannuation sector over the study period does not appear to be driving these results.

Keywords: RETAIL SUPERANNUATION FUND; FUND PERFORMANCE; FUND CASH FLOWS (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:30:y:2005:i:2:p:229-244

DOI: 10.1177/031289620503000203

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