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Family Matters: Rankings Within Fund Families and Fund Inflows
Author(s) -
Kempf Alexander,
Ruenzi Stefan
Publication year - 2007
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.2007.02062.x
Subject(s) - target date fund , mutual fund , equity (law) , income fund , fund administration , position (finance) , closed end fund , open end fund , sovereign wealth fund , incentive , index fund , investment fund , manager of managers fund , economics , monetary economics , business , finance , microeconomics , institutional investor , political science , corporate governance , law
This paper examines the influence of the position of a fund within its family on its subsequent net‐inflows. Our empirical study of the US equity mutual fund market shows that reaching a top position within the family leads to large inflows. These inflows accrue beyond those expected, given the performance of the fund in its respective market segment. The effect is much stronger in large families than in small families. We also find that inflows significantly increase if a fund moves into the top positions within its family from one year to another. These results lead to competition within the fund family and to important risk taking incentives for fund managers.