The changing nature of work and working life

Performance and Fund flows 2008

Client:  Industry Super Network

This project aims to provide empirical evidence on the relationship between fund performance and fund flows. The project uses fund performance metrics developed in a separate project along with fund flow data to test whether funds that consistently outperform attract funds and those that consistently underperform lose funds. The flow of funds within the industry is one of the mechanisms by which competition within the funds management industry should see an equalisation of returns. The absence of sufficient performance-related flows is one of the reasons that performance persistence has been observed in empirical research on funds. Further, the project examines the desirable and actual role of financial planners in informing fund members about performance and advising them on fund switching options.