Title: Are broker-sold funds flows sensitive to fund performance or not? Evidence from Indian mutual funds market

Authors: Dipika; Shveta Singh

Addresses: Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, 125001, India ' Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, 125001, India

Abstract: The primary purpose of the study is to investigate whether funds flows are sensitive to fund performance or not and to gain insight into how investors from different fund categories react to funds flow and performance relationships in the broker-sold segment. By using the panel dataset, the sample of 138 surviving open-ended regular mutual funds from April 2014 to March 2018 is considered. The study assesses the evidence that past performance has a significant positive influence on the fund flow and different categories have different level of investor sophistication through Sirri and Tufano (1998) fractional flow model, piecewise regression and Fama and MacBeth (1973) approach. The study's findings can be used by the regulatory bodies and policymakers to develop effective regulations in order to increase market penetration, investor awareness, and transparency. The findings of the study assist the various stakeholders in understanding the behaviour pattern of investors while making an investment decision.

Keywords: Indian mutual fund; equity fund; fund flows; fund performance; balanced funds; raw return; fund age.

DOI: 10.1504/GBER.2023.134357

Global Business and Economics Review, 2023 Vol.29 No.4, pp.470 - 491

Received: 15 Dec 2021
Accepted: 21 May 2022
Published online: 19 Oct 2023 *

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