| Summary: | 碩士 === 國立高雄大學 === 金融管理學系碩士班 === 97 === Dollar-cost averaging is the main way to invest for Taiwan investors. Although the dollar-cost averaging is widespread, prior research on the relationship between fund flow and dollar-cost averaging is rare. This thesis examines whether that dollar-cost averaging influences the existent relationship between fund characteristics and fund flows. To do so, we use a unique and remarkably complete dataset, which contains the complete inflows and outflows separately, which is different from previous papers that have used estimated net flows only.
This research has three parts. The first part examines whether fund characteristics, such as past performance, size, fee, and volatility affect fund flows. The second part separates the whole sample to two subsamples and investigates whether these relationships documented in the first part are different in the two subsamples. The third part uses a dummy variable to measure the level of dollar- cost averaging and documents how the ratio of dollar-cost averaging affects the relationship between fund characteristic and fund flows.
The result presents that the funds with a higher dollar-cost averaging ratio will be less sensitive to past performance and fees, but more sensitive to fund size. In the other words, compared to other investors in the market, dollar-cost averaging investors prefer to invest in larger funds but the intention of chasing the winners is weaker. That is, dollar-cost averaging investors can reduce the incentive of the tournament effects of fund managers. In order to attract such investors, fund managers should enlarge the fund size to have more inflows.
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