Spillover Effects in Mutual Fund Companies

35 Pages Posted: 18 Jan 2011 Last revised: 27 Feb 2015

See all articles by Clemens Sialm

Clemens Sialm

University of Texas at Austin - McCombs School of Business; National Bureau of Economic Research (NBER)

T. Mandy Tham

Singapore Management University - Lee Kong Chian School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: February 17, 2015

Abstract

Our paper investigates spillover effects across different business segments of publicly traded financial conglomerates. We find that the investment decisions of mutual fund shareholders do not just depend on the prior performance of the mutual funds, they also depend on the prior performance of the funds’ management companies. Flows into equity and bond mutual funds increase with the prior stock price performance of the funds’ management companies after controlling for fund performance and other fund characteristics. The sensitivity of flows to the management company’s performance is not justified by the subsequent performance of the affiliated funds. The results indicate that the reputation of a company’s brand has a significant impact on the behavior of its customers.

Keywords: Mutual Fund Flows, Financial Conglomerates, Umbrella Branding, Performance Predictability

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

Suggested Citation

Sialm, Clemens and Tham, Tze-Minn, Spillover Effects in Mutual Fund Companies (February 17, 2015). McCombs Research Paper Series No. FIN-03-11, Available at SSRN: https://ssrn.com/abstract=1742416 or http://dx.doi.org/10.2139/ssrn.1742416

Clemens Sialm (Contact Author)

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

HOME PAGE: http://faculty.mccombs.utexas.edu/Clemens.Sialm/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Tze-Minn Tham

Singapore Management University - Lee Kong Chian School of Business ( email )

50 Stamford Road
Singapore 178899
Singapore

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