Not Available for Download

Changing Names with Style: Mutual Fund Name Changes and Their Effects on Fund Flows

Posted: 1 Dec 2004  

Michael J. Cooper

University of Utah - David Eccles School of Business

Huseyin Gulen

Purdue University - Krannert School of Management

P. Raghavendra Rau

University of Cambridge

Multiple version iconThere are 2 versions of this paper

Abstract

We examine whether mutual funds change their names to take advantage of current hot investment styles, and what effects these name changes have on inflows to the funds, and to the funds' subsequent returns. We find that the year after a fund changes its name to reflect a current hot style, the fund experiences an average cumulative abnormal flow of 28 percent, with no improvement in performance. The increase in flows is similar across funds whose holdings match the style implied by their new name and those whose holdings do not, suggesting that investors are irrationally influenced by cosmetic effects.

Keywords: Name changes, market efficiency, cosmetic effects, mutual fund flows

Suggested Citation

Cooper, Michael J. and Gulen, Huseyin and Rau, P. Raghavendra, Changing Names with Style: Mutual Fund Name Changes and Their Effects on Fund Flows. Journal of Finance, Vol. 60, No. 6, pp. 2825-2858, 2005. Available at SSRN: https://ssrn.com/abstract=625082

Michael J. Cooper

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

Huseyin Gulen

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

P. Raghavendra Rau (Contact Author)

University of Cambridge ( email )

Cambridge Judge Business School
Trumpington Street
Cambridge, Cambridgeshire CB21AG
United Kingdom
3103626793 (Phone)

HOME PAGE: http://www.raghurau.com/

Paper statistics

Abstract Views
1,270