International mutual funds, capital flow volatility, and contagion : a survey /

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Bibliographic Details
Author / Creator:Gelos, Gaston, author.
Imprint:[Washington, D.C.] : International Monetary Fund, ©2011.
Description:1 online resource (28 pages) : illustrations (some color)
Language:English
Series:IMF working paper, 2227-8885 ; WP/11/92
IMF working paper ; WP/11/92.
Subject:
Format: E-Resource Book
URL for this record:http://pi.lib.uchicago.edu/1001/cat/bib/12499326
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Other authors / contributors:International Monetary Fund. Western Hemisphere Department, issuing body.
ISBN:1283560186
9781283560184
9781462352586
1462352588
1455252298
9781455252299
9781455253319
1455253316
Notes:Includes bibliographical references.
Summary:Gaining a better understanding of the behavior of international investors is key for informing the debate about the optimal response to capital flows and about reforms to the international financial architecture. In this context, recent research on the behavior of international mutual funds at the micro level has expanded our knowledge about the drivers of portfolio flows and the mechanisms behind the transmission of financial shocks across countries. This paper provides a brief survey of this literature, with a focus on the empirical evidence for emerging markets. Overall, the behavior of international mutual funds is complex and overly simplistic characterizations are misleading. However, there is broad-based evidence for momentum trading among funds. Moreover, funds tend to avoid opaque markets and assets, and this behavior becomes more pronounced during volatile times. Portfolio rebalancing mechanisms are clearly important in explaining contagion patterns, even in the absence of common macroeconomic fundamentals. From a surveillance point of view, this implies that monitoring the exposures of large investors at a micro level is crucial to assess vulnerabilities.
Other form:Print version: Gelos, Gaston. International Mutual Funds, Capital Flow Volatility, and Contagion-A Survey. Washington : International Monetary Fund, ©2011 9781455253319
Standard no.:10.5089/9781455252299.001