Product DescriptionThis digital document is a journal article from Journal of International Financial Markets, Institutions & Money, published by Elsevier in 2007. The article is delivered in HTML format and is available in your Amazon. com Media Library immediately after purchase. You can view it with any web browser. Description: This paper analyses relations between stock market returns and mutual fund flows in Korea. A positive relationship exists between stock market returns and mutual fund flows, measured as stock purchases and sales and net trading volumes. In aggregate, mutual funds are negative feedback traders. Standard causality tests suggest that it is predominantly returns that drive flows, while stock sales may contain information about returns. After controlling for declining markets, the results suggest Korean equity fund managers tend to increase stock purchases in times of rising market volatility, possibly disregarding fundamental information, and to sell in times of wide dispersion in investor beliefs.
Relations between mutual fund flows and stock market returns in Korea
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