Financial markets play an important role in the economies of the world as they are supporting economic development. The present paper focuses on the young financial markets of Central and Eastern Europe with the focus on three selected cases: Romania, Slovakia and Hungary. In these countries, the capital markets are studied through the assessment of performances and risks associated with mutual funds by comparison with stock exchanges. Statistical documentation and statistical empirical research were used in order to compare mutual funds' evolution with the stock markets' evolution. The period of analysis also comprised the global financial and economic crisis, with obvious consequences on the results of the analysis. Among the main findings of the study are: mutual funds performed better (both in terms of returns and risks) than stock exchanges in the periods of economic turmoil; a movement from investing in highrisk assets (equity) towards investing in low-risk assets (bonds and monetary assets) takes place in the periods of economic distress; there were more similarities than differences in the evolutions of mutual funds and stock exchanges in these three countries, illustrating common characteristics at the

Abstract. The evolution of mutual funds in terms of their inflows and outflows is seen as a good

Purpose This paper aims to make an analysis of investment behaviour in mutual funds, by looking at different investment decision influencers and trying to identify the extent to which the investment decision is knowledge-based. The paper has three main purposes, namely, to assess the degree to which the considered factors influence investment decision-making in young capital markets from Central and Eastern Europe (CEE); to compare the investment behaviour in the three considered countries; and to characterise investment behaviour in periods of economic turbulence. Design/methodology/approach The researchers considered a model of investment behaviour comprising six influencing factors. Inferential statistics through multiple linear regression was applied using the MATLAB R2014a software. The decision to invest was measured by the flow of new capital attracted by the fund (dependent variable) and the considered influencing factors (independent variables) were: the size of the fund, the risk associated to the fund, the growth of the fund, the growth of the fund category, the performance of the fund in its category. The research was conducted in Romania, Slovakia and Hungary. The period of study included the global economic crisis of 2007-2008. Findings The results illustrated that all considered factors do have an influence on the investment behaviour of investors in CEE, but with different levels of impact. The study concludes that the investment decision is partially knowledge-based, as investors in the region consider only some of the available information when making the decision to invest. Investment behaviour of investors in CEE is rather similar than dissimilar when deciding to invest in mutual funds. However, based on the differences between countries, it can be stated that the Hungarian investor is more mature and more informed than the others, when making investment decisions. Originality/value The study contributes to the exiting literature through the analysis of investment behaviour in young capital markets that are less studied in the literature. The limited number of studies considering mutual funds, usually comprise one fund category, while the present research considers all five most prevalent mutual funds categories for the studied period. It also contributed by collecting data from a less studied geographical region, CEE with three specific case studies, namely, Romania, Slovakia and Hungary that are looked at in a comparative manner.

Mutual funds and their evolution represent an expression of the performances of capital markets in the majority of states. The inflows and the outflows in mutual funds are used to evaluate the achievements obtained in capital markets all over the world. At the same time, both individual and organizational investors guide their acquisition decisions on information about past accomplishments of the various mutual funds and invest in funds that registered good and very good performances in the past, while trying to give up less performing funds. However, the decision is usually asymmetrical, as investors rather take into consideration the very good past performances of mutual funds and prefer to invest in those, while the pace of giving up to less performing funds is not accordingly prominent. Investors’ behaviour can differ from one country to another and the behaviour of those originating from developed countries and more mature capital markets have been studied to a higher extent internationally, while developing capital markets have been less studied so far. The present paper looks at capital markets from the perspective of mutual funds in three (rather) emerging capital markets located in Central and Eastern Europe, namely: Romania, Slovakia and Hungary. The inflows and outflows in mutual funds are analyzed for the 2007-2014 period and based on that, the investors’ behaviour in the three countries is looked at. The analysis has both a dynamic and a comparative character with the purpose to identify similarities and differences between the three analyzed countries, as well as to identify how they compare with more mature financial and capital markets. The analysis also tries to distinguish specific features of both evolution of mutual funds and investors’ behaviour, in a period that comprised two different stages of the economic cycle: financial crisis and the debut of the economic recovery period.

When deciding on tactical asset allocation, investors often support their decision-making using a scoring system that ranks the asset classes according to various criteria. Based on weekly fund flows since 2001, this article reveals that fund flow data can add significant value to such a scoring system. It shows that fund flow data allows one to achieve excess returns versus equally-weighted benchmarks in tactical regional equity allocation, tactical fixed income sector allocation, and tactical equity versus bond allocation. Investors can find the relevant fund flow information necessary to implement the backtested strategies in our weekly Cross Asset Monitor. When deciding on tactical asset allocation, investors often support their decision-making using a scoring system that ranks the asset classes according to various criteria. In this article, we analyse whether fund flows add value to such a scoring system. Money flows are the ultimate drivers of asset prices. But it is not just that money flows drive performance-good asset performance also tends to attract money flows. This interplay means fund flows tend to show some inertia, and as such should contain some momentum information.