TY - JOUR T1 - The Asset Allocation of Managers and Investors: <em>Evidence from Hybrid Funds</em> JF - The Journal of Wealth Management SP - 69 LP - 81 DO - 10.3905/jwm.2013.16.3.069 VL - 16 IS - 3 AU - Aymen Karoui Y1 - 2013/10/31 UR - https://pm-research.com/content/16/3/69.abstract N2 - This article analyzes the response of the asset allocation process to fund performance and broad market conditions as well as the market determinants of fund flows for hybrid funds. Using a fairly large sample of hybrid funds, the author’s findings reveal that managers increase their stock allocation and reduce their bond allocation subsequent to periods of outperformance; the stock allocation is positively correlated with past stock returns and negatively correlated with bond returns. For the bond allocation, he documents a negative correlation with lagged stock and bond returns. In addition, fund flows react favorably to an increase in stock and bond returns, while high-stock fund flows exhibit a higher sensitivity to stock returns.TOPICS: Portfolio construction, performance measurement, security analysis and valuation, fixed income and structured finance ER -