Next Article in Journal
How the Economic and Financial Situation of the Community Affects Sport Clubs’ Resources: Evidence from Multi-Level Models
Previous Article in Journal
Acknowledgement to Reviewers of the International Journal of Financial Studies in 2014
Article Menu

Export Article

Open AccessArticle
Int. J. Financial Stud. 2015, 3(1), 3-30; doi:10.3390/ijfs3010003

The Relation between Past Flows and Future Performance: Simple Investment Strategies in the Mutual Fund Sector

Faculty of Business and Economics, University of Augsburg, Universitaetsstrasse 16, 86159 Augsburg, Germany
Academic Editor: Nicholas Apergis
Received: 4 November 2014 / Revised: 7 January 2015 / Accepted: 29 January 2015 / Published: 4 February 2015
View Full-Text   |   Download PDF [380 KB, uploaded 4 February 2015]

Abstract

In the mutual fund literature, it is an established fact that investors “chase past performance”. However, the opposite impact of flows on performance is widely discussed. Mainly, liquidity costs are held responsible for short-term erosion of performance, while high inflows enhance performance over longer horizons. I investigate this relation for various groups of equity, bond, and money market funds and find significant outperformance in high inflow funds over several months, especially for specific bond fund groups. In addition, I test whether this information can be exploited using simple investment strategies but find that the abnormal returns are too low to offset associated costs. View Full-Text
Keywords: mutual fund performance; fund flows; trading strategies mutual fund performance; fund flows; trading strategies
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

Scifeed alert for new publications

Never miss any articles matching your research from any publisher
  • Get alerts for new papers matching your research
  • Find out the new papers from selected authors
  • Updated daily for 49'000+ journals and 6000+ publishers
  • Define your Scifeed now

SciFeed Share & Cite This Article

MDPI and ACS Style

Rohleder, M. The Relation between Past Flows and Future Performance: Simple Investment Strategies in the Mutual Fund Sector. Int. J. Financial Stud. 2015, 3, 3-30.

Show more citation formats Show less citations formats

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Int. J. Financial Stud. EISSN 2227-7072 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top