Best Buys and Own Brands: Investment Platforms’ Recommendations of Mutual Funds

Cookson, Gordon, Jenkinson, Tim, Jones, Howard and Martinez, Jose Vicente (2017) Best Buys and Own Brands: Investment Platforms’ Recommendations of Mutual Funds. Saïd Business School Working Paper 2017-14.

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Abstract

Individual investors increasingly trade and hold mutual funds via investment platforms, many of which make their own fund recommendations. Using data from leading platforms in the U.K., we examine the drivers, impact, and performance of these recommendations. Platforms’ recommendations favor funds with a low cost to investors, but also favor affiliated funds and those which share more of their commission revenues with platforms. Recommendations affect flows considerably, although investors somewhat discount recommendations of affiliated funds. Recommended funds outperform non-recommended funds overall, but recommended affiliated funds do not.

Item Type: Oxford Saïd Research Paper
Keywords: Mutual Funds, Investment Platforms, Recommendations, Finance
Subject(s): Finance
Date Deposited: 05 Sep 2017 09:42
Last Modified: 05 Sep 2017 09:42
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6503

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