in price dispersion. TRACE-associated decreases in crossfund bond mark dispersion provide indirect support for …

We make use of a unique dataset of SEC Form N-SAR filings to examine the gross flows of U.S. bond funds. We find that …, we see that, like equity funds, bond fund investors chase returns. Most of the return chasing is done by inflows. Funds … nearly 0.6% in assets per month. Next, we find that positive net flows cause bond funds to diversify their holdings …

performance, risk management, and flows of bond mutual funds. Measuring active share at both the issue and issuer level, the … average bond fund has an issue-level (issuer-level) active share of over 90% (60%). Funds with higher issuer-level active … share persistently earn higher alphas, which helps explain the relatively slow growth of passively managed bond funds …