Success and Failure on the Corporate Bond Fund Market
Journal of Asset Management 19(6), 429-443.
43 Pages Posted: 2 Aug 2014 Last revised: 28 Mar 2019
Date Written: July 5, 2018
We present the first broad overview of the factors determining corporate bond fund success and failure in terms of performance and survival. We show that the main determinant of survival is size. Performance matters only for small funds while large funds survive unconditionally, consistent with maintaining fee revenues. We neither find persistence in performance nor diseconomies of scale. This is due to advantages of larger funds in corporate bond trading. Other fund and family characteristics are unrelated to performance and survival, contrasting previous finings in equity funds. Thus, there are similarities but also important differences between the factors determining success and failure on the corporate bond and equity fund markets.
Keywords: Corporate bond funds, performance, disappearance and survival, fund size, flow
JEL Classification: G11, G12
Suggested Citation: Suggested Citation