Spillover Effects in Mutual Fund Companies

Abstract:     
Our paper investigates spillover effects across different business segments of publicly traded mutual fund management companies. We find that the prior stock price performance of the management company has a significant impact on the money flows of the affiliated mutual funds. Investment flows into mutual funds increase significantly with the prior performance of the management company even if the company performance does not predict future fund performance. These results indicate that the financial health of a diversified firm has a significant impact on the prospects of the various business segments.

Number of Pages in PDF File: 47

Keywords: Mutual Fund Flows, Conglomerates, Financial Distress

JEL Classification: G10, G14, G21, G23, G33

working papers series