Journal of Banking & Finance Vol. 129 2021
Internet search, fund flows, and fund performance
Abstract
This study uses the Google search volume index as a direct measure of investor attention to explore the connection between attention-grabbing information and fund flows, future performance, and the survivorship of newly issued funds. We find that investors often engage in attention-driven purchases of new funds that have captured their attention online. However, fund investors who conduct internet searches and make attention-driven purchases are less sophisticated and fail to allocate their capital for earning abnormal returns. We also find that attention-induced inflows can help sustain new funds in competitive fund markets via potential mitigation of mergers and liquidations. Our robustness checks show similar results for old funds, but attention-driven fund flows do not enhance the survival of old funds.
- DOI
- 10.1016/j.jbankfin.2021.106166
- Volume
- 129
- Pages
- 106166
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib