Abstract
This paper studies the relation between past performance and fund flows into and out of mutual funds in the Italian market. Using monthly data on more than 800 funds divided in 23 investment categories I try to evaluate the length of the relevant evaluation period used by investors to measure the past performance of mutual funds, the level of competition between funds that operate in different investment categories and the likeliness between the behavior of gross investments (flows into mutual funds) and withdrawals (flows out of mutual funds). I find that investors evaluate fund performance on a very short time horizon (three months seems to be the relevant period), that the relevant performance measure is the position in the category ranking and not the return of the fund (the competition is segmented: funds do not compete across categories), that while fund inflows are related positively to past performance there is not any sensible relation between withdrawals and past performance.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
