In this paper we study the relationship between past performance and investor flows of Norwegian mutual funds by using a dataset from February, 2003 to May, 2007. We divide mutual fund investors into two subgroups-retail investors and institutional investors-to investigate the potential difference between these two kinds of investors in their reactions to past performance. Our results indicate that both types of investors would respond to sophisticated performance measure, and this response is asymmetric. Funds that are ranked higher based on recent performance would receive more net inflows from retail investors as well as institutional investors than funds in the lower ranks. Retail investors and institutional investors do not seem to behave very differently in the Norwegian mutual fund market.
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