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- Title
Costly Search and Mutual Fund Flows.
- Authors
SIRRI, ERIK R.; TUFANO, PETER
- 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.
- Subjects
UNITED States; FLOW of funds; MUTUAL funds; INVESTMENTS; FINANCIAL markets; INVESTMENT products; FINANCIAL services industry; PORTFOLIO management (Investments); RATE of return
- Publication
Journal of Finance (Wiley-Blackwell), 1998, Vol 53, Issue 5, p1589
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/0022-1082.00066