How Important is the Distribution Channel for Mutual Fund Flows?

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

We use bank failures to analyse exogenous variation in the distribution channel of bankaffiliated mutual funds. Our contribution is three-fold. First, we establish a causal effect from the distribution channel of mutual funds to retail investors’ fund portfolios. As our main empirical result, we secondly document that the magnitude of flows induced by changes in the distribution channel is large; it drives at least a third of households’ mutual fund choices. Third, we show that mutual fund flows are not directed into high-rated funds. We conclude that the distribution channel has a large, causal, and detrimental impact on investors’ portfolios.
Original languageEnglish
Publication date2020
Number of pages53
Publication statusPublished - 2020
EventThe 80th Annual Meeting of American Finance Association. AFA 2020 - San Diego, United States
Duration: 3 Jan 20205 Jan 2020
Conference number: 80
https://afajof.org/annual-meeting/

Conference

ConferenceThe 80th Annual Meeting of American Finance Association. AFA 2020
Number80
CountryUnited States
CitySan Diego
Period03/01/202005/01/2020
Internet address

Keywords

  • Mutual funds
  • Retail investors
  • Fund flows
  • Distribution channel

Cite this

Florentsen, B., Nielsson, U., Raahauge, P., & Rangvid, J. (2020). How Important is the Distribution Channel for Mutual Fund Flows?. Paper presented at The 80th Annual Meeting of American Finance Association. AFA 2020, San Diego, United States.
Florentsen, Bjarne ; Nielsson, Ulf ; Raahauge, Peter ; Rangvid, Jesper. / How Important is the Distribution Channel for Mutual Fund Flows?. Paper presented at The 80th Annual Meeting of American Finance Association. AFA 2020, San Diego, United States.53 p.
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Florentsen, B, Nielsson, U, Raahauge, P & Rangvid, J 2020, 'How Important is the Distribution Channel for Mutual Fund Flows?' Paper presented at, San Diego, United States, 03/01/2020 - 05/01/2020, .

How Important is the Distribution Channel for Mutual Fund Flows? / Florentsen, Bjarne; Nielsson, Ulf; Raahauge, Peter; Rangvid, Jesper.

2020. Paper presented at The 80th Annual Meeting of American Finance Association. AFA 2020, San Diego, United States.

Research output: Contribution to conferencePaperResearchpeer-review

TY - CONF

T1 - How Important is the Distribution Channel for Mutual Fund Flows?

AU - Florentsen, Bjarne

AU - Nielsson, Ulf

AU - Raahauge, Peter

AU - Rangvid, Jesper

PY - 2020

Y1 - 2020

N2 - We use bank failures to analyse exogenous variation in the distribution channel of bankaffiliated mutual funds. Our contribution is three-fold. First, we establish a causal effect from the distribution channel of mutual funds to retail investors’ fund portfolios. As our main empirical result, we secondly document that the magnitude of flows induced by changes in the distribution channel is large; it drives at least a third of households’ mutual fund choices. Third, we show that mutual fund flows are not directed into high-rated funds. We conclude that the distribution channel has a large, causal, and detrimental impact on investors’ portfolios.

AB - We use bank failures to analyse exogenous variation in the distribution channel of bankaffiliated mutual funds. Our contribution is three-fold. First, we establish a causal effect from the distribution channel of mutual funds to retail investors’ fund portfolios. As our main empirical result, we secondly document that the magnitude of flows induced by changes in the distribution channel is large; it drives at least a third of households’ mutual fund choices. Third, we show that mutual fund flows are not directed into high-rated funds. We conclude that the distribution channel has a large, causal, and detrimental impact on investors’ portfolios.

KW - Mutual funds

KW - Retail investors

KW - Fund flows

KW - Distribution channel

KW - Mutual funds

KW - Retail investors

KW - Fund flows

KW - Distribution channel

M3 - Paper

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Florentsen B, Nielsson U, Raahauge P, Rangvid J. How Important is the Distribution Channel for Mutual Fund Flows?. 2020. Paper presented at The 80th Annual Meeting of American Finance Association. AFA 2020, San Diego, United States.