Research Seminar: Assistant Professor Badrinath Kottimukkalur

Title: Is Money in Index Funds Smart?

Abstract: Passive funds with inflows generate positive risk-adjusted returns during the subsequent year and outperform funds with outflows, consistent with the notion that index fund money is “smart.” Similar outperformance during the next year is not present in active funds seeing higher inflows. Passive funds that outperform see high inflows even though their performance does not persist after accounting for size, value, and momentum. These findings suggest that the “smart money” effect in passive funds reflects genuine investor ability, where unexpected flows outperform, and is not driven by the expected flows associated with naïve trend chasing or by price pressure effects.

Bio: Badrinath Kottimukkalur is an Assistant Professor of Finance at the George Washington University. His research interests include asset pricing, behavioral finance, and mutual funds. His work has been published in the Review of Financial Studies and the Journal of Financial and Quantitative Analysis. He received his PhD in Finance from Emory University. Prior to PhD, he did equity research on US Technology stocks. He received his Bachelors in Electronics and Communications Engineering from College of Engineering, Guindy and his PGPM in Finance from Great Lakes Institute of Management. He is a CFA charterholder.

Note: Tea/coffee and sandwiches will be served between 12:15 - 1:15 pm at room 419 (TBS Boardroom).

Photographs will be taken during this seminar and may be shared on social media. If you do not wish to appear, please notify tbs.research@tcd.ie.