Performance and market share: evidence from the German mutual fund industry

  • In this paper we analyze the relation between fund performance and market share. Using three performance measures we first establish that significant differences in the risk-adjusted returns of the funds in the sample exist. Thus, investors may react to past fund performance when making their investment decisions. We estimated a model relating past performance to changes in market share and found that past performance has a significant positive effect on market share. The results of a specification test indicate that investors react to risk-adjusted returns rather than to raw returns. This suggests that investors may be more sophisticated than is often assumed.

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Author:Jan Pieter KrahnenORCiDGND, Frank A. Schmid, Erik TheissenORCiDGND
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 1997,01
Series (Serial Number):CFS working paper series (1997, 01)
Document Type:Working Paper
Year of Completion:1997
Year of first Publication:1997
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2005/05/25
Tag:fund growth; investment decisions; mutual fund performance
GND Keyword:Deutschland; Investmentfonds; Wachstum; Marktanteil
Issue:September 1997
First version - May 1997
Institutes:Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht