This paper highlights the “dumb money” effect of Indian retail mutual fund investors who chase funds that subsequently underperform. Retail investors show twice the propensity to chase top past performers; their cash flows are strongly negatively correlated to contemporaneous market returns indicating a contrarian, rather than a “buy and hold” strategy. They make up to 1.3% less in terms of raw returns compared to institutional investors, and the gap is accentuated for funds with superior risk adjusted returns. Collectively, the results reveal that retail investors trade actively with poor timing and fund selection skills despite having access to professional fund management.

本文重点介绍了追逐随后表现不佳的基金的印度散户共同基金投资者的“傻钱”效应。散户投资者追逐过去表现最好的股票的倾向是后者的两倍；他们的现金流与同期市场回报呈强烈负相关，表明采取逆势交易而非“买入并持有”策略。与机构投资者相比，他们的原始回报减少了 1.3%，而对于风险调整后回报较高的基金，这种差距更加明显。总体而言，结果显示散户投资者尽管能够获得专业的基金管理，但在时机和基金选择技巧不佳的情况下仍积极交易。