Madison Avenue Meets Wall Street: Mutual Fund Families, Competition and Advertising

51 Pages Posted: 31 Jan 2006

See all articles by Steven Gallaher

Steven Gallaher

University of Texas at Austin - Department of Finance

Ron Kaniel

University of Rochester - Simon Business School; CEPR

Laura T. Starks

University of Texas at Austin - Department of Finance

Date Written: January 2006

Abstract

We examine the effects of mutual fund families' strategic decisions, particularly the advertising decision, on investor flows into the families. We find evidence that beyond performance a family's strategic decisions such as advertising, distribution channels, fund offerings and expense ratios, have significant effects on investor flows. Consistent with evidence at the individual fund level, investor flows have an increasing and convex relation to a family's past performance for high performing families. We also find a similar association between a family's flows and its relative levels of advertising expenditures with a significant positive effect for high relative advertisers only.

Keywords: funds, advertising, flows, fundflows

Suggested Citation

Gallaher, Steven and Kaniel, Ron and Starks, Laura T., Madison Avenue Meets Wall Street: Mutual Fund Families, Competition and Advertising (January 2006). Available at SSRN: https://ssrn.com/abstract=879775 or http://dx.doi.org/10.2139/ssrn.879775

Steven Gallaher

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
(512) 232-2326 (Phone)

Ron Kaniel (Contact Author)

University of Rochester - Simon Business School ( email )

Rochester, NY 14627
United States

HOME PAGE: http://rkaniel.simon.rochester.edu

CEPR ( email )

London
United Kingdom

Laura T. Starks

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-5899 (Phone)
512-471-5073 (Fax)

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