The True Colors of Money: Racial Representation and Asset Management

Lina Han; Xing Huang; Ohad Kadan; Jimmy Wu

doi:10.1093/rfs/hhag038

The True Colors of Money: Racial Representation and Asset Management

Lina Han¹; Xing Huang²; Ohad Kadan³; Jimmy Wu⁴

¹ The University of Massachusetts Amherst , · ² Washington University in St. Louis and Cornell University , · ³ Arizona State University · ⁴ University of Iowa and Washington University in St. Louis ,

Review of Financial Studies 2026

We examine the role of race and ethnicity in the mutual fund context at two distinct levels. At the fund manager level, we document a co-racial tilt—funds managed by minority-dominant (White-dominant) teams allocate larger portfolio weights to minority-led (White-led) firms. This tilt is not associated with superior performance. It diminishes as fund managers gain experience, suggesting the presence of inaccurate statistical discrimination. At the investor level, we find that minority-dominant funds are penalized similarly to White-dominant funds for poor performance but are not rewarded as much for superior performance. Overall, our results uncover race-related investment choices at both levels.

DOI: 10.1093/rfs/hhag038
Language: en
Export: BibTeX
Sources: openalex crossref