http://reposit.library.du.ac.bd:8080/xmlui/xmlui/handle/123456789/1786 2026-04-07T01:56:27Z 2026-04-07T01:56:27Z Islam, Mohd. Anisul http://reposit.library.du.ac.bd:8080/xmlui/xmlui/handle/123456789/1787 2021-11-02T05:42:42Z 2020-09-16T00:00:00Z

Investor Sentiment in the Equity Market and Investments in Corporate-Bond Funds Islam, Mohd. Anisul This study explores the relation between investor sentiment in the equity market and investments in corporate-bond funds. Investors tend to move into and out of corporate-bond funds when contemporaneous investor sentiment in equity market differs from historical average. Specifically, a one-standard-deviation decrease in equity-market sentiment generates 0.1% and 0.4% inflows for active and index funds, respectively. It reflects the time varying flight-to-safety behavior of investors. However, the corporate-bond funds with negative or low exposure to equity-market sentiment appear to attract inflows and funds with positive or high exposure to equity-market sentiment experience outflows, indicating that investors are likely to avoid sentiment risk. Out-of-sample analysis shows that corporate-bond funds with the highest negative sentiment exposure significantly outperform the funds with the highest positive sentiment exposure by 2.22%-2.52% per year. The results are pervasive across active and index funds, present in different periods and robust to using composite sentiment metrics.

2020-09-16T00:00:00Z