AbstractThis paper highlights the“dumb money” effect of Indian retail mutual fund investors who chase funds that subsequently underperform. Retail investors show twice the propensity to chase top past performers; their cashflows are strongly negatively correlated to contemporaneous market returns indicating a contrarian, rather than a“buy and hold” strategy. They make up to 1.3% less in terms of raw returns compared to institutional investors, and the gap is accentuated for funds with superior risk-adjusted returns. Collectively, the results reveal that retail investors trade actively with poor timing and fund selection skills despite having access to professional fund management.© 2021 Published by Elsevier Ltd on behalf of the Indian Institute of Management Bangalore. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0)