Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
The Determinants of Investment Flows: Retail versus
Institutional Mutual Funds
Galla Salganik
This paper compares the fund selection criteria used by investors
in retail mutual funds with the criteria of investors in institutional
mutual funds. I find that, compared with investors of retail mutual
funds, clients of institutional mutual funds use more quantitatively
sophisticated criteria such as risk-adjusted return measures and
tracking error, demonstrate stronger momentum-driven and
herding behaviors, and are less sensitive to fund expense ratio. In
addition, I provide evidence that the previously-documented
convex form of the flow-performance relationship is driven mostly
by retail funds.
Field: Finance

Department of Business Administration, Guilford Glazer Faculty of Business and Management, BenGurion University of the Negev, P.O.Box 653, 84105 Beer Sheva, Israel. E-mail: salganik@som.bgu.ac.il.
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