Zheng (1999) further develops the analyses of Gruber (1996), expanding the data set to cover the universe of all equity funds between 1970 and 1993. She finds that funds that enjoy positive net f lows subsequently perform better on a risk-adjusted basis than funds that experience negative net f lows. She also examines whether a trading strategy could be devised based on the predictive ability of net f lows and finds evidence that information on net f lows into smal funds could be used to make risk-adjusted profits
