Comparing Performance Sensitivity of Retail and Institutional Mutual Funds’ Investment Flows

21 Pages Posted: 22 May 2017 Last revised: 3 Aug 2017

See all articles by Mieszko Mazur

Mieszko Mazur

Catholic University of Lille - IESEG School of Management

Galla Salganik-Shoshan

Ben-Gurion University of the Negev

Maxim Zagonov

Toulouse Business School, Université de Toulouse

Date Written: December 31, 2016

Abstract

In this paper, we examine and compare the form of the flow-performance relationship for U.S. retail and institutional mutual funds. We provide evidence that the convex form of the flow-performance function documented by previous research characterizes mostly the relationship in the upper region of the performance scale. In contrast, the flow-performance relationship for the low-performance region appears to be concave. Furthermore, we document that the observed convexity is more pronounced for retail funds, while the concavity can be mainly attributed to institutional funds.

Keywords: flow-performance relationship, institutional funds, retail funds, mutual fund flows, performance evaluation

JEL Classification: G02, G11, G23

Suggested Citation

Mazur, Mieszko and Salganik-Shoshan, Galla and Zagonov, Maxim, Comparing Performance Sensitivity of Retail and Institutional Mutual Funds’ Investment Flows (December 31, 2016). Finance Research Letters, Vol. 22, pp. 66-73, 2017. Available at SSRN: https://ssrn.com/abstract=2972017

Mieszko Mazur

Catholic University of Lille - IESEG School of Management ( email )

3 Rue de la Digue
Office: A321
Puteaux, 92800
France

Galla Salganik-Shoshan (Contact Author)

Ben-Gurion University of the Negev ( email )

Beer Sheva
Israel

Maxim Zagonov

Toulouse Business School, Université de Toulouse ( email )

20 bd Lascrosses
Toulouse, Select State 31068
France
+33(0)561294974 (Phone)
+33(0)561294994 (Fax)

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