Do Past Performance and Past Cash Flows Explain Current Cash Flows into Retail Superannuation Funds in Australia?

Angela Frino, Richard Heaney, David Service

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)

Abstract

This paper examines the link between current-quarter cash flows and both past performance and past cash flows using a sample of Australian retail superannuation fund data (managed growth and managed stable) drawn from the period 1994 to 2000. This is a rapidly growing sector within the superannuation industry and it reflects investment behaviour of smaller investors rather than institutions and large corporations. Using both the Gruber (1996) approach and panel-data analysis we find a positive relationship between past performance and current-quarter cash flows as well as evidence of persistence in cash flows over time. Panel-data analysis also identifies a positive relationship between current net cash flows and past performance and cash inflows as well as a negative relationship between current net cash flows and past outflows. Market-wide growth in the retail superannuation sector over the study period does not appear to be driving these results.

Original languageEnglish
Pages (from-to)229-244
Number of pages16
JournalAustralian Journal of Management
Volume30
Issue number2
DOIs
Publication statusPublished - Dec 2005
Externally publishedYes

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