Explaining Differences in the Flow-Performance Sensitivity of Retail and Institutional Mutual Funds—International Evidence ()
ABSTRACT
We use data from 13 countries to study differences
in the flow-performance sensitivity between institutional and retail investors.
Our results show marked differences between non-US and the US in how institutional and
retail investors react to past performance. Compared to retail investors,
institutional investors sell more poor performers and buy less top performers
outside the US, while there is no difference in how institutional and retail investors react to
past performance in the US. When we split our sample into countries with more
and less sophisticated investors, our results also show significant differences
in the flow-performance sensitivity of institutional and retail investors. Overall,
our findings are consistent with institutional investors being more
sophisticated than retail investors but only in countries where investors are
on average less sophisticated.
Share and Cite:
Miguel, A. and Su, D. (2019) Explaining Differences in the Flow-Performance Sensitivity of Retail and Institutional Mutual Funds—International Evidence.
Theoretical Economics Letters,
9, 2711-2731. doi:
10.4236/tel.2019.97170.
Cited by
No relevant information.