No. 1461 - Geographic shareholder dispersion and mutual fund flow risk

by Javier Gil-Bazo, Alexander Kempf and Raffaele Santioni
July 2024
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Drawing on the Eurosystem's Securities Holdings Statistics, this paper analyses the relationship between the degree of geographical dispersion of investors and the risk of euro-area mutual funds facing large redemption requests from their unitholders.

Mutual funds with a more geographically dispersed investor base have more volatile inflows and redemptions and their investors are more sensitive to fund performance. The positive association between the geographical dispersion of investors and the volatility of flows does not depend on the presence or absence of institutional investors or of investors resident outside the euro area and can be seen both before and after the pandemic.

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  1. 19 July 2024
    No. 1461 - Geographic shareholder dispersion and mutual fund flow risk
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