TY  - JOUR
AU  - Berk,Jonathan B.
AU  - Tonks,Ian
TI  - Return Persistence and Fund Flows in the Worst Performing Mutual Funds
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13042
PY  - 2007
Y2  - April 2007
UR  - http://www.nber.org/papers/w13042
L1  - http://www.nber.org/papers/w13042.pdf
N1  - Author contact info:
Jonathan B. Berk
Graduate School of Business
Stanford University
518 Memorial Way
Stanford CA 94305-5015
Tel: 650/721-1280
Fax: 650/725-6152
E-Mail: jonathan.b.berk@gmail.com

Ian Tonks
University of Exeter
Finance & Investment
Rennes Drive
Exeter, EX4 4PU   UK
Tel: 44-1392-263461
E-Mail: i.tonks@exeter.ac.uk
AB  - We document that the observed persistence amongst the worst performing actively managed mutual funds is attributable to funds that have performed poorly both in the current and prior year. We demonstrate that this persistence results from an unwillingness of investors in these funds to respond to bad performance by withdrawing their capital. In contrast, funds that only performed poorly in the current year have a significantly larger (out)flow of funds/return sensitivity and consequently show no evidence of persistence in their returns.
ER  -