Impact of capital flows on the performance of Norwegian mutual funds
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This study investigates the relationship between fund performance and past capital flows, allowing for the possible impact of past performance and fund size. We use a unique data set consisting of daily returns, monthly capital inflows and outflows for all Norwegian mutual funds. This includes all equity, bond and money market funds registered and traded at some point during 2006 - 2014 on Oslo Stock Exchange, making our data set free of survivorship bias. Our main focus is equity funds. We find strong evidence of short-term performance persistence for the full sample of Norwegian mutual funds, and we find that equity mutual fund size is significantly related to performance when accounting for performance persistence. However, we do not find any significant impact of past inflows, outflows or net flows on fund performance.