Information Costs and Mutual Fund Flows

Stefan Engstrom and Anna Westerberg ()
Additional contact information
Anna Westerberg: National Social Insurance Board

No 555, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: This paper examines how investor and capital flows into mutual funds in the Swedish pension system are related to fund characteristics. Similarly to U.S. studies, we show that individuals chase past returns and have a strong preference for lower-fee funds. However, our results suggest that past returns are less important than previous studies suggest. A more important determinant of fund inflows is information costs. For instance, foreign-based funds with a track record similar to that of domestic funds attract fewer investors and receive less capital. Moreover, new funds without a track record also receive lower inflows.

Keywords: Flows; Information; Pension System; Portfolio Choice (search for similar items in EconPapers)
JEL-codes: G11 G23 H55 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2004-01-28
New Economics Papers: this item is included in nep-cfn, nep-ifn, nep-pbe and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0555

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