Review of Financial Studies Vol. 28 No. 8 2015
What's in a Name? Mutual Fund Flows When Managers Have Foreign-Sounding Names
Abstract
We show that name-induced stereotypes affect the investment choices of U.S. mutual fund investors. Managers with foreign-sounding names have about 10% lower annual fund flows, and this effect is stronger among funds with investor clienteles more likely to be suspicious of foreigners. Foreign-named managers experience lower appreciation (greater decline) in flows following good (bad) performance. Following 9/11, flows to funds with managers with Middle-Eastern-sounding names declined abnormally. In an experimental setting in which skill differences are absent, individuals allocate 11% less money to an index fund managed by a foreign-named manager. This gap widens following the Boston marathon bombings.
- Volume
- 28
- Issue
- 8
- Pages
- 2281-2321
- Sources
- bibtex:phds-export.bib