Who pays when mutual funds dump stocks?

When mutual fund withdrawals force fire sales, limited-capital investors step in as temporary buyers, but only if compensated for the risk of holding unwanted inventory. Using 20 years of fund flow data, the researchers quantify this 'residual supply' premium: forced sellers generate predictable losses today and gains over the next month, with the premium doubling when market-wide traders are stretched thin. The effect concentrates in thinly-traded stocks, revealing who really bears the cost of redemption pressure.