Indeed, recent work by Chen, Goldstein, and Jiang is very much in this spirit, although it restricts its analysis to equity funds and doesn’t consider the fixed-income categories that are the focus of the current paper. 6 With this framing in mind, let me comment briefly on the empirical work in the paper.
There is a lot of it, and I will just touch on a couple of points. A first observation is that the heavy focus on flows in and out of funds is a bit at odds with the theoretical model. As I mentioned earlier, the model, taken literally, is one of closed-end funds with fixed AUM.