Performance and market share: Evidence from the German mutual fund industry

Jan Krahnen (), Frank A. Schmid and Erik Theissen

No 1997/01, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: In this paper we analyze the relation between fund performance and market share. Using three performance measures we first establish that significant differences in the risk-adjusted returns of the funds in the sample exist. Thus, investors may react to past fund performance when making their investment decisions. We estimated a model relating past performance to changes in market share and found that past performance has a significant positive effect on market share. The results of a specification test indicate that investors react to risk-adjusted returns rather than to raw returns. This suggests that investors may be more sophisticated than is often assumed.

Keywords: mutual fund performance; fund growth; investment decisions (search for similar items in EconPapers)
JEL-codes: G11 G23 (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:199701

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