Smart or Dumb? Asset Allocation Ability of Mutual Fund Investors and the Role of Broker Advice

39 Pages Posted: 1 Mar 2020

Date Written: February 1, 2010

Abstract

In this paper, I investigate the asset allocation ability of mutual fund investors. Specifically, I examine differences among non-proprietary brokers, proprietary brokers and direct channels regarding their asset allocation ability. In aggregate, mutual fund investors do not seem to have superior asset allocation ability. However, I do find that money flows through non-proprietary brokers show significantly higher asset allocation performance than money flows through proprietary brokers. This is consistent with the view that non-proprietary agents are more likely to act on behalf of their customers as opposed to proprietary agents who represent their affiliated companies.

Keywords: Mutual funds, asset allocation, investor sentiment, brokers

JEL Classification: G1, G2, G11, G12, G24

Suggested Citation

Fang-Klingler, Jieyan, Smart or Dumb? Asset Allocation Ability of Mutual Fund Investors and the Role of Broker Advice (February 1, 2010). Available at SSRN: https://ssrn.com/abstract=3417575 or http://dx.doi.org/10.2139/ssrn.3417575

Jieyan Fang-Klingler (Contact Author)

Quoniam Asset Management GmbH ( email )

Frankfurt
Germany

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