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The Performance and Cash Flows of Newly Raised Funds

Author

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  • Chun-An Li

    (Department of Finance, National Yunlin University of Science and Technology, 123 University Road, Section 3, Douliou, Yunlin 64002, Taiwan, R.O.C.)

  • Hong-Chih Ma

    (Department of Finance, National Yunlin University of Science and Technology, 123 University Road, Section 3, Douliou Yunlin 64002, Taiwan, R.O.C.)

Abstract

The main purpose of this paper is to examine whether "newly raised funds" (NRFs) can actually achieve the performance targets. The targets are usually provided to investors by the fund companies at the time when such new funds are introduced. Our results show that the performance of the new funds is weakly inferior to that of existing funds. Furthermore, the results also indicate that NRFs with lower cash flows tend to outperform those with higher cash flows. We also find that reports appearing in the newspapers relating to such NRFs have significantly positive effects on cash flows. Thereby, it indicates that more promotional efforts can attract more money.

Suggested Citation

  • Chun-An Li & Hong-Chih Ma, 2010. "The Performance and Cash Flows of Newly Raised Funds," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 13(04), pages 539-557.
    • Handle: RePEc:wsi:rpbfmp:v:13:y:2010:i:04:n:s0219091510002062
    DOI: 10.1142/S0219091510002062
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    Citations

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    Cited by:

    1. Jiong Gong & Ping Jiang & Shu Tian, 2016. "Contractual mutual fund governance: the case of China," Review of Quantitative Finance and Accounting, Springer, vol. 46(3), pages 543-567, April.
    2. Martin Rohleder & Dominik Schulte & Marco Wilkens, 2017. "Management of flow risk in mutual funds," Review of Quantitative Finance and Accounting, Springer, vol. 48(1), pages 31-56, January.
    3. Yao Zheng & Eric Osmer, 2018. "The Relationship between Hedge Fund Performance and Stock Market Sentiment," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 21(03), pages 1-29, September.

    More about this item

    Keywords

    New fund; fund flows; fund performance; mutual fund;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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