Investors blindly follow mutual fund managers, risking financial losses.
Managers who handle multiple mutual funds see more money flowing into a fund when another fund they manage has done well in the past. This is because investors think the manager is skilled based on past returns. The other fund's performance matters more if it did really well, has a similar style to the fund in question, or if the manager is new. However, past success in one fund doesn't guarantee success in another. Some investors don't take out money when one fund does poorly, which affects the overall performance.