Taking matters into their own hands: How Investors' stock preferences affect mutual fund flows in China

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

Pacific-Basin Finance Journal Pub Date : 2024-09-17 DOI:10.1016/j.pacfin.2024.102537

Shi Li, Rongsha Fu, Meng Li

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Abstract

We examine the impact of investors' stock preferences in mutual funds' portfolios on fund flows in China. Our results indicate that mutual funds with an investment style consistent with individual investors' stock preferences have higher fund flow. We find that it affects only individual investors' fund flow, not institutional investors' fund flow. This impact is greater during periods of low economic policy uncertainty or high investor sentiment. Moreover, this impact is reduced with larger fund size or longer fund age. The reasonable explanation is that investors infer fund managers' skills by analyzing the stocks in the fund's portfolio. This explanation is further validated by the results using index funds as the control group. Our findings challenge the assumption that mutual fund investors fully delegate decisions to professionals. Further analysis reveals there is no significant correlation between these preferences and future returns. Our findings contribute to the study of mutual fund investor behavior from a fresh perspective.

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自己的事情自己做投资者的股票偏好如何影响中国的共同基金流动

我们研究了共同基金投资组合中投资者的股票偏好对中国资金流动的影响。结果表明，投资风格与个人投资者股票偏好一致的共同基金具有更高的资金流量。我们发现，它只影响个人投资者的资金流量，而不影响机构投资者的资金流量。在经济政策不确定性低或投资者情绪高涨时，这种影响更大。此外，基金规模越大或基金年龄越长，这种影响就越小。合理的解释是，投资者通过分析基金投资组合中的股票来推断基金经理的能力。以指数基金为对照组的结果进一步验证了这一解释。我们的研究结果对共同基金投资者完全将决策权委托给专业人士的假设提出了质疑。进一步的分析表明，这些偏好与未来回报之间没有明显的相关性。我们的研究结果有助于从一个全新的角度研究共同基金投资者的行为。

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来源期刊

Pacific-Basin Finance Journal BUSINESS, FINANCE-

CiteScore

6.80

自引率

6.50%

发文量

157

期刊介绍： The Pacific-Basin Finance Journal is aimed at providing a specialized forum for the publication of academic research on capital markets of the Asia-Pacific countries. Primary emphasis will be placed on the highest quality empirical and theoretical research in the following areas: • Market Micro-structure; • Investment and Portfolio Management; • Theories of Market Equilibrium; • Valuation of Financial and Real Assets; • Behavior of Asset Prices in Financial Sectors; • Normative Theory of Financial Management; • Capital Markets of Development; • Market Mechanisms.