The World of Mutual Funds

However, there are a number of advantages to examining the smart money effect in fund management using our U.K.mutual fund data. First, ourmoney f low data aremonthly rather than quarterly. Second, we observe exact f lows rather than approximations based on fund values and fund returns. Third, we can distinguish between institutional and individualmoney f lows. Fourth, we can distinguish between purchases and sales. A further advantage is that we are able to examine mutual fund investor behavior in a different institutional setting from that of the United States. For example, unlikeU.S.mutual funds,U.K. funds competewithinwell-defined peer groups, which may facilitate investors’ decision making. Also, the tax overhang issue (Barclay, Pearson, and...
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The World of Mutual Funds