A comparison between German and Spanish equity fund markets
The influence of portfolio past returns on new money and investor flows is an attractive and well-known topic in financial research. Extensive literature, mainly focusing on American markets, provides evidence for the interest of past performance when it comes to explaining the behaviour of investme...
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Veröffentlicht in: | Journal of asset management 2007-09, Vol.8 (3), p.147-151 |
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Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | The influence of portfolio past returns on new money and investor flows is an attractive and well-known topic in financial research. Extensive literature, mainly focusing on American markets, provides evidence for the interest of past performance when it comes to explaining the behaviour of investment fund investors. This topic has also been frequently studied in the financial literature: the performance persistence phenomenon. This paper analyses both aspects in order to determine whether fund performance is persistent in two consecutive periods and, therefore, whether investors can consider past returns to be a good indicator to guide their future investments. The German and Spanish equity fund markets are analysed with the aim of comparing these topics in both fund markets. These two specific markets have been chosen because the German market provides an example of a developed fund industry, in contrast with the relatively young Spanish market, which undergoes a process of expansion in the period analysed. Performance persistence is stronger in the Spanish equity fund market, probably because this market is less developed; however, the influence of past returns on the attitude of fund investors is more important in the German market. |
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ISSN: | 1470-8272 1479-179X |
DOI: | 10.1057/palgrave.jam.2250069 |