A low-interest rate environment induces higher demand for income-generating assets, such as high-dividend stocks and high-coupon bonds. In this paper, we explore the impact of this “reaching-for-income” phenomenon on fund flows of corporate bond mutual funds. We find that high...

Do corporate bond funds have a real impact on firm policies? In this paper, we examine whether fund herding alters the overall information environment of a firm’s credit risk, and thus affects the firm’s decision to issue bonds. Using the firm-level measure of herding by U.S. bond mutual...

This paper provides a comprehensive examination of money flows in corporate bond funds which, though less researched, represent an important setting to study investor behavior. Based on a large sample of corporate bond funds over 1991–2014, we first show that flows are sensitive to both fund...