The exclamation mark of Cain: Risk salience and mutual fund flows

B-Tier
Journal: Journal of Banking & Finance
Year: 2022
Volume: 134
Issue: C

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study a regulation that increased mutual funds’ risk salience through name change. Using daily fund flow data and several identification strategies, we find that requiring certain fixed income mutual funds to affix an exclamation mark ("!") to their names caused a statistically and economically significant decline in their net flows, with a larger effect on fund inflows than outflows. The exclamation mark's impact stems from retail investors, both those that seek financial advice and those that invest independently. Mutual funds “defamed” by the exclamation mark designation actually increased their exposure to the particular risk highlighted by the regulator.

Technical Details

RePEc Handle
repec:eee:jbfina:v:134:y:2022:i:c:s0378426621002831
Journal Field
Finance
Author Count
3
Added to Database
2026-01-26