Costly Search and Mutual Fund Flows

Sirri, Erik and Tufano, Peter (1998) Costly Search and Mutual Fund Flows. The Journal of Finance, 53 (5). pp. 1589-1622.

Abstract

This paper studies the flows of funds into and out of equity mutual funds. Consumers base their fund purchase decisions on prior performance information, but do so asymmetrically, investing disproportionately more in funds that performed very well the prior period. Search costs seem to be an important determinant of fund flows. High performance appears to be most salient for funds that exert higher marketing effort, as measured by higher fees. Flows are directly related to the size of the fund's complex as well as the current media attention received by the fund, which lower consumers' search costs.

Item Type: Article
Keywords: investments; securities markets; consumer lending; portfolio management
Date Deposited: 25 Oct 2011 15:39
Last Modified: 14 Aug 2015 13:04
URI: http://eureka.sbs.ox.ac.uk/id/eprint/943

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