The Behavior of Investor Flows in Corporate Bond Mutual Funds Academic Article

abstract

• This paper provides a comprehensive examination of money flows in corporate bond funds, which, although less researched, represent an important setting to study investor behavior. Based on a large sample of corporate bond funds over 19912014, we first show that flows are sensitive to both fund performance and macroeconomic conditions, but unlike equity funds, the flowperformance relationship is not convex. Then, we find that investor flows can predict fund performance. More importantly, the predictability cannot be explained by return momentum or price pressure but is subsumed by performance persistence. Finally, an examination of idiosyncratic flows reveals little evidence that fund investors use finer-than-public information. This paper was accepted by Lauren Cohen, finance.

authors

• Chen, Yong

published proceedings

• MANAGEMENT SCIENCE

altmetric score

• 3

author list (cited authors)

• Chen, Y., & Qin, N.

citation count

• 37

complete list of authors

• Chen, Yong||Qin, Nan

publication date

• January 2017

publisher

• Institute for Operations Research and the Management Sciences (INFORMS)  Publisher

published in

• Management science  Journal

keywords

• Corporate Bond Funds
• Flow-performance Relation
• Idiosyncratic Flows
• Investor Flows
• Predictability Of Flows

Digital Object Identifier (DOI)

• 10.1287/mnsc.2015.2372

start page

• 1365

end page

• 1381

volume

• 63

issue

• 5

URL

• http%3A%2F%2Fdx.doi.org%2F10.1287%2Fmnsc.2015.2372