Investor Flows to Asset Managers: Causes and Consequences

Posted: 25 Nov 2014

See all articles by Susan Kerr Christoffersen

Susan Kerr Christoffersen

University of Toronto - Rotman School of Management; Copenhagen Business School

David K. Musto

University of Pennsylvania - Finance Department

Russ Wermers

University of Maryland - Robert H. Smith School of Business

Date Written: December 2014

Abstract

Cash flows between investors and funds are both cause and effect in a complex web of economic decisions. Among the issues at stake are the prospects and fees of the funds, the efforts and risk choices by the funds’ managers, the pricing and comovement of the assets they trade, the stability of the financial system and the real economy, and the retirement security and protection of the investors. There is an accordingly large and growing literature on flows that has concentrated on the main retail investment pool, the open-end mutual fund, and has used flows to explore many aspects of retail financial decision making. We survey this literature and, where relevant, describe how open-end flows compare to other investment vehicles. We also identify opportunities both for future research and for refinement of mutual fund design, in particular as suggested by the recent rethinking of retail investment pools in the European Union.

Suggested Citation

Christoffersen, Susan E. and Musto, David K. and Wermers, Russell R., Investor Flows to Asset Managers: Causes and Consequences (December 2014). Annual Review of Financial Economics, Vol. 6, pp. 289-310, 2014. Available at SSRN: https://ssrn.com/abstract=2530447 or http://dx.doi.org/10.1146/annurev-financial-110613-034339

Susan E. Christoffersen (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416 946 5647 (Phone)
416 971 3048 (Fax)

HOME PAGE: http://www.rotman.utoronto.ca/schristoffersen

Copenhagen Business School

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

David K. Musto

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

Russell R. Wermers

University of Maryland - Robert H. Smith School of Business ( email )

Department of Finance
College Park, MD 20742-1815
United States
301-405-0572 (Phone)
301-405-0359 (Fax)

HOME PAGE: http://www.rhsmith.umd.edu/finance/rwermers/

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