The Performance and Cash Flows of Newly Raised Funds

Chun-An Li () and Hong-Chih Ma ()
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Chun-An Li: Department of Finance, National Yunlin University of Science and Technology, 123 University Road, Section 3, Douliou, Yunlin 64002, Taiwan, R.O.C.
Hong-Chih Ma: Department of Finance, National Yunlin University of Science and Technology, 123 University Road, Section 3, Douliou Yunlin 64002, Taiwan, R.O.C.

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2010, vol. 13, issue 04, 539-557

Abstract: The main purpose of this paper is to examine whether "newly raised funds" (NRFs) can actually achieve the performance targets. The targets are usually provided to investors by the fund companies at the time when such new funds are introduced. Our results show that the performance of the new funds is weakly inferior to that of existing funds. Furthermore, the results also indicate that NRFs with lower cash flows tend to outperform those with higher cash flows. We also find that reports appearing in the newspapers relating to such NRFs have significantly positive effects on cash flows. Thereby, it indicates that more promotional efforts can attract more money.

Keywords: New fund; fund flows; fund performance; mutual fund (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0219091510002062

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