Record Details

Are Both Fund Managers and Fund Investors Smart? Evidence from U.S. Mutual Funds

Journal of Financial Studies

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Title Are Both Fund Managers and Fund Investors Smart? Evidence from U.S. Mutual Funds
 
Creator Hsiang-Hsuan Chin
Pin-Huang Chou
Huimin Chung
Yu-En Lin
 
Description Past performance and fund flow have been identified as two of the most important factors in explaining future mutual fund performance. However, performance persistence and the smart-money effect are considered as two independent phenomena. We examine the competing abilities of past performance and fund flow in predicting future fund returns. The empirical evidence confirms performance persistence and the smart-money effect as two independent effects. A closer examination indicates that performance persistence lasts longer, whereas the smart-money effect exists only in the short run. The smart money eventually becomes dump in the long run because of a significant negative relation between pervious fund inflow and the subsequent long-term fund returns.
Key words：Mutual fund performance, Fund flows, Smart money effect, Dumb money effect
 
Publisher Journal of Financial Studies
財務金èžå­¸åˆŠ
 
Date 2011-03-10
 
Type —
 
Format application/pdf
 
Identifier http://www.jfs.org.tw/index.php/jfs/article/view/2011050
 
Source Journal of Financial Studies; Vol 17, No 4 (2009); 31
財務金èžå­¸åˆŠ; Vol 17, No 4 (2009); 31
 
Language —