This case discusses the importance of liquidity in financial markets, using the dramatic volatility in flows of mutual funds in 2008, as an example. While the case is designed for MBA students in investment or portfolio management course, it is also suitable for advanced undergraduate course. It is written from the point of view of a fund manager, which has undergone considerable maturity in 2008 and is considering to use or not use reflow Management LLC to "provide liquidity" service. The case requires students to examine the nature and extent of trading costs of mutual funds, the fund flows can cause additional sales and service innovation as fusion attempts to address these questions. Through this analysis, students will better understand what is meant by the term "liquidity" and liquidity, or lack thereof, could adversely affect the performance of the portfolio. "Hide
by Richard B. Evans, Michael Mills Source: Darden School of Business 12 pages. Publication Date: August 24, 2009. Prod. #: UV2560-PDF-ENG
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