Fund renaming and fund flows: Evidence from China's stock market crash in 2015

摘要

Understanding the reasons and mechanisms for fund flows in capital markets is very important. The literature lacks evidence testing the mechanism affecting fund flow following a fund name change. Based on mutual fund renaming events during the 2015 stock market downturn in China, we show the impact of a name change on fund flow. First, compared with "equity" funds not renamed, those renamed "hybrid" from "equity" have a 15% increase in inflows after the change. Second, this increase cannot be fully explained by investment strategies, performance, risk, or fee structure. Third, the increase is achieved by influencing the attention of investors, as indicated by a significant jump in the number of Internet searches and forum posts related to the renamed funds. Finally, the name change inflow effect is stronger for funds from star investment management companies and for those with a longer history.

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