Institutional Buying Behavior and Net Fund Inflow: Empirical Study on Taiwanese Equity Mutual Fund
Date Issued
2015
Date
2015
Author(s)
Tsai, Tsung-Lin
Abstract
This study focuses on the fund managers’ buying decision following net fund inflow. Observations of the behavior of Taiwanese equity mutual fund managers are made within 2001-14 time frame. I demonstrate how the fund flows affect the fund managers’ buying behavior and how the behavior affects future performance and subsequent fund flows. The main finding of this study is fund managers tend to invest in the stocks they already have when facing net fund inflows, which increases the funds’ performance compared to other competitors’ and attract further inflows. This indicates fund inflows allow fund managers to gain confidence and provide them room to wait for the market to correct the undervalued stocks and enjoy persistent performance. Also, unlike previous studies, I found that Taiwanese fund managers do not show disposition effect.
Subjects
Behavioral Finance
Institutional Investor
Fund Flow
Buying decision
Fund Performance
Type
thesis
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ntu-104-R02723019-1.pdf
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