46 Pages Posted: 2 Aug 2014 Last revised: 16 Sep 2017
Date Written: July 2, 2017
We present the first overview of the factors determining success and failure of corporate bond funds in terms of: survival, flow and performance. The main determinant of survival is size. Performance matters only for small funds, consistent with maintaining fee revenues. Flow is strongly related to investors’ chasing performance. However, they are less sensitive to fees than equity fund investors are but funds do not take advantage of it as they display competitive fee setting behavior. Corporate bond funds show no persistence in performance. They also do not suffer from diseconomies of scale, which contrasts previous findings for equity funds.
Keywords: Corporate bond funds, performance, disappearance and survival, fund size, flow
JEL Classification: G11, G12
Suggested Citation: Suggested Citation
Rohleder, Martin and Scholz, Hendrik and Wilkens, Marco, Success and Failure on the Corporate Bond Fund Market (July 2, 2017). Available at SSRN: https://ssrn.com/abstract=2475000 or http://dx.doi.org/10.2139/ssrn.2475000