Abstract

The relationship between net fund flow and performance of open-end funds was studied in this paper. The empirical tests on the performance and size of open-end funds in China show that the net fund flow of funds is positively correlated with pre-performance of funds, while the performance of funds is negatively correlated with the net fund flow of funds. These empirical studies imply that investors chose funds according to their historical performance, while the growing size decreases the funds’ capability of achieving excellent performance.

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