Institutional Investor Expectations, Manager Performance, and Fund Flows

Jones, Howard and Martinez, Jose Vicente (2016) Institutional Investor Expectations, Manager Performance, and Fund Flows. The Journal of Financial and Quantitative Analysis (Forthcoming). (Accepted)

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Abstract

Using survey data we analyze institutional investors’ expectations about the future performance of fund managers and the impact of these expectations on asset allocation decisions. Past performance is a driver of both plan sponsors’ expectations of fund managers’ future performance and of the flows into (and out of) those fund managers, although it is not informative about their future performance. The non-performance attributes of funds drive expectations but do not drive flows, while investment consultants’ recommendations are critical to flows but have only a minor impact on expectations. Our findings suggest that, when plan sponsors allocate assets, they do not act fully on their expectations, but prefer to base their decisions on more defensible variables at their disposal.

Item Type: Article
Keywords: Institutional asset management, asset flows, fund performance, service quality, investment consultants, finance
Subject(s): Finance
Date Deposited: 10 Jun 2016 14:09
Last Modified: 21 Jul 2017 15:29
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6175

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