We use a new dataset to study how mutual fund flows depend on past performance across 28 countries. We find that flows are convex with past performance, creating an incentive for managers to take excessive risk. The flow-performance convexity is less pronounced in countries with higher levels of...

We study how culture influences mutual funds around the world. Uncertainty Avoidance (UA), which is related to ambiguity aversion, is negatively associated with flow-performance sensitivity, deviation from the fund benchmark, fund alpha, and the fraction of active management across the 25...

This paper studies the effect of Morningstar ratings on fund flows and fund performance predictability using a proprietary data set of equity funds from Norway. Controlling for a number of variables proxying for fund and firm visibility, we find that fund flows respond asymmetrically to changes...

This paper examines aggregate domestic and foreign equity allocations around the world using CPIS data. We analyze the cross-country determinants of the domestic and foreign equity bias and the evolution over time of these biases and their determinants. Economic development, restrictions on...

We use a new data set to study the determinants of the performance of open-end actively managed equity mutual funds in 27 countries. We find that mutual funds underperform the market overall. The results show important differences in the determinants of fund performance in the U.S. and elsewhere...

We use data from 33 countries to study how a fund’s affiliation with large families shapes the flow–performance relationship internationally. Our results show that the effect of family size on the fund flows’ response to performance depends on the sophistication of investors in a country....

We investigate why spreads on corporate bonds are so much larger than expected losses from default. Systematic factors make very little contribution to spreads, even if higher moments or downside effects are taken into account. Instead we find that sizes of spreads are strongly related to...

In the extensive debate about investment professionals' ability to add value, there has been scant evidence on the role played by industry expertise. To shed light on this issue, we study own industry investing. Specifically, we analyse how well individual mutual funds as well as mutual fund...

The financial sector is unique in being largely self-governed: the majority of financial firms' shares are held by other financial institutions. This raises the possibility that monitoring of financial firms is especially undermined by conflicts of interest due to personal and professional links...