The Role of Investor Expectations in Investment Decisions: Evidence from the Mutual Fund Industry

2011 ◽  
Author(s):  
Saurin Patel
Keyword(s):  
Mutual Fund ◽  
Investment Decisions ◽  
Fund Industry ◽  
Mutual Fund Industry ◽  
Investor Expectations

A Study on Multi-Class Fund Flows and Consumer Protection

2017 ◽  
Vol 25 (1) ◽  
pp. 41-74
Author(s):  
Tai-Yong Roh ◽  
Sun-Joong Yoon ◽  
Sung Won Seo
Keyword(s):  
Financial Crisis ◽  
Mutual Fund ◽  
Fund Flows ◽  
Empirical Observation ◽  
2008 Financial Crisis ◽  
Fund Industry ◽  
Mutual Fund Industry ◽  
The 2008 Financial Crisis

We examine whether the suitability principles hold for the mutual fund industry in Korea, by analyzing the dynamics and the characteristics of the multi-class fund flows. For 12-years from 2002 to 2013, the volatility of fund flows associated with A-class fund, which is more appropriate for long-term investments, is larger than that associated with C-class fund. Therefore, it can be interpreted that the suitability principles do not hold. To examine the empirical observation, we mainly focus on the role of the dollar cost averaging (DCA) style funds. We show that if we adjust for the effect of DCA funds, the suitability principles does not hold only before the 2008 financial crisis. Thus, we argue that individuals' irrational decision making is caused by heavy investments on A-class fund through DCA style types before the financial crisis. This leads to the observed violation of the suitability principles before the crisis. Our findings also suggest that after the financial crisis, the mutual fund industry in Korea becomes mature.

Mutual Fund Industry and its Prospects in Indian Scenario

2016 ◽  
Vol 5 (1) ◽  
Author(s):  
Ragini Shah ◽  
Yashba Humra
Keyword(s):  
Capital Market ◽  
Mutual Fund ◽  
Success Factor ◽  
Critical Success ◽  
Savings Rate ◽  
Business To Consumer ◽  
Small Investors ◽  
Fund Industry ◽  
Mutual Fund Industry

Institutions and banks have been an integral part of capital market operations. Small investors, who possess limited income, find it difficult to pool their saving in the capital market. To cater the needs of small investors under the guidance of professional team of experts mutual fund came into existence. Moreover, India’s savings rate has been between 30-35 percent since last few years but investment in mutual funds have been minimal as compared to other avenues of investment. However, mutual fund business follows a Business to Business model (B2B) rather than a Business to Consumer (B2C) model and hence, distribution is a critical success factor for any mutual fund. Thus, an effort is being made by the professionals to make mutual fund as a pull model rather than a push model. The paper aims to center towards the inception and growth of mutual fund in India. Indian mutual fund industry has witnessed considerable growth since its inception in 1963. Assets Under Management (AUM) have surged to Rs 8,684 bn in June 13 from just Rs 250 mn in Mar 65. In a span of 48 years, the industry has registered a CAGR of 24%. The impressive growth in Indian Mutual fund industry in recent years can largely be attributed to various factors such as rising household savings, comprehensive regulatory framework, favorable tax policies, and introduction of several new products, investor education campaign and role of distributors. Thus, in this paper an effort is being made to capture the key prospects of mutual fund along with challenges faced by under penetrated Indian market.

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