Spillover Effects in Mutual Fund Companies

42 Pages Posted: 19 Mar 2011

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

Nanyang Technological University (NTU); Singapore Management University - Lee Kong Chian School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: January 17, 2011

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 and the management turnover of the affiliated mutual funds. Mutual funds managed by poorly performing firms experience unexpectedly low flows of new money and exhibit a significantly higher attrition of talented fund managers even if the mutual funds themselves performed well. Our results remain strong for companies where mutual funds account for only a very small fraction of the overall revenues and hold for both equity and bond mutual funds. These results indicate that the financial health of a diversified firm has a significant impact on the prospects of the various business segments.

Keywords: Financial Conglomerates, Financial Distress, Mutual Fund Flows

JEL Classification: G10, G20, G23

Suggested Citation

Sialm, Clemens and Tham, Tze-Minn and Tham, Tze-Minn, Spillover Effects in Mutual Fund Companies (January 17, 2011). AFA 2012 Chicago Meetings Paper, Available at SSRN: https://ssrn.com/abstract=1786747 or http://dx.doi.org/10.2139/ssrn.1786747

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)

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Cambridge, MA 02138
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Tze-Minn Tham

Nanyang Technological University (NTU) ( email )

S3 B1b-61 Nanyang Avenue
Singapore, 639798
Singapore
65-67906049 (Phone)

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

50 Stamford Road
Singapore 178899
Singapore

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