The Determinants Of Open-end Fund’s Cash Inflows

With the continuous development of the fund industry, a growing number of fund products emerged in the market, which led to increasing competitions among fund management companies. The most concerned issue offund management companies is how to increase the size of a fund and attract more capital inflows so as to occupy a larger market share under this situation. Therefore, the determinants of fund capital inflows not only become the studying focus of the fund company, but also led to a strong interest of scholars. The data show that investors are concerned about the historical performance of the fund in selecting funds.Fund rating agencies ratefunds based on their performance,thenthose so-called Star Funds emerge,and investors show a strong preference for thoseFunds.This article has done a thorough discussion and analysis of the determinants of fund capital inflowsbased on the background discussed above.Our conclusions are listed as follow:(a) the Fund’s performance and fund net inflows showed positive, concave curve relationship.(b)Fund dividends and fund net inflows showed a significant positive correlation.(c) The star fund neither brings itself significant net capital inflow, nor brings significant capital to the non-star fundof the same family.(d)Though the dog fund caused itself significant net capitaloutflow, it did not do the same thing to other fund of the same family.(e) There was no interaction among the different funds of the same fund management company in capital inflows.