Journal of International Business Studies

, Volume 39, Issue 7, pp 1169–1177

Determinants of flows into retail international equity funds

Article

DOI: 10.1057/palgrave.jibs.8400408

Cite this article as:
Zhao, X. J Int Bus Stud (2008) 39: 1169. doi:10.1057/palgrave.jibs.8400408

Abstract

Diversification benefits appear to be a major reason why investors choose international equity funds. Funds less correlated with the US market tend to receive higher flows from investors. In addition, investors prefer funds that invest in a diversified portfolio of securities from different regions in the world to funds that focus only on a specific region. Risk-adjusted return is shown to exert greater effect on flows into international equity funds than raw return. International equity funds from fund families offering a greater number of investment objectives also receive higher flows. On the other hand, international equity fund investors do not appear to be sensitive to expenses or exchange rates.

Keywords

international equity fundsinvestor behaviorfund flowsinternational diversification

Copyright information

© Academy of International Business 2008

Authors and Affiliations

  1. 1.China Europe International Business SchoolShanghaiChina