Global mutual fund flows

Abstract

In this paper, we examine how different variables impact the profitability-flows relationship in mutual funds across different countries around the world; we also determine whether fund investors prefer some variables against others when making investment decisions. We compare different performance measures throughout this work; we examine the relationship between flows and performance employing a dataset of global equity mutual funds, from January 1990 to December 2023. Furthermore, we evaluate whether the results vary depending on the size of the fund and its position with respect to the market. Our evidence shows that investors consider mutual fund performance for their investment decisions. We also show that investors of small mutual funds are influenced by the risk-adjusted extra return, while large funds investors only consider the previous performance of the fund, although both attract flows when the market evolves favorably.