International equity fund investors flee from funds with poor raw returns. In addition, they chase risk-adjusted performance leaders instead of raw return leaders. While international growth fund investors flock into larger funds, regionally focused fund investors invest more in smaller funds presumably due to price impact concerns. Regionally diversified funds tend to receive higher flows if their fund families offer more choices of investment objectives. A stronger U.S. dollar leads investors to increase their investments in European equity funds but to stay away from the riskier developing markets equity funds. International equity fund investors do not appear to be sensitive to expenses or load structures.
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