Fund names versus family names: Implications for mutual fund flows

Abstract

An emerging literature shows that investors are sensitive to mutual fund names. Using a sample of US equity funds over the period 1993–2017, we provide evidence that funds with names that are closer to those of their families attract more flows and display a stronger performance-flow relationship. This name bias is more persistent among old and large fund families and in retail funds. Our results are in line with the literature on social biases and costly searches and show that seemingly innocuous differences in fund attributes, such as fund names, can translate into significant differences in investor decisions.