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U.S. Mutual Fund Retail Investors in International Equity Markets: Is the Tail Wagging the Dog?
Author:
Mr. Jorge A Chan-Lau
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and
Ms. Li L Ong
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Series:
IMF Working Papers
Volume/Issue:
Volume 2005: Issue 162
Language:
English
Publication Date:
01 Aug 2005
DOI:
https://doi.org/10.5089/9781451861815.001
ISBN:
9781451861815
ISSN:
1018-5941
Pages:
22
Keywords:
WP; emerging market; equity fund; fund; mutual funds; retail investors; equity markets; dedicated funds; crossover funds; emerging market equity funds; equity fund investor; equities return; emerging markets equities; United States money markets; allocation behavior; emerging market securities; U.S. dollar; investor class; emerging market capitalization; Japan equities; investor allocation behavior; Emerging and frontier financial markets; Stock markets; Stocks; Money markets; Europe; Global; Asia and Pacific
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Do the dynamics of net flows to U.S. retail mutual funds affect equity returns in emerging markets? The question merits further examination since retail investors in mutual funds can exert a much greater degree of "control" over these funds via cash injections or redemptions at any time. A VAR analysis shows increased discrimination across emerging market regions after the Asian crisis as investors focused on individual regions rather than on emerging markets as a generic asset class. Crossover funds allocations also appear to affect emerging market returns. Furthermore, investment decisions by fund managers seem to be largely driven by retail investor allocations.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund