Does investor sentiment affect fund crashes? Evidence from Chinese open-end funds

Hu Wang, Shouwei Li, Yuyin Ma and Shuyang Jiang

The North American Journal of Economics and Finance, 2022, vol. 60, issue C

Abstract: This paper aims to detect the impact of investor sentiment on the open-end fund crashes, drawing on the open-end stock funds and partial stock funds of China for the 2009–2019 period. The results show that the rise of investor sentiment will significantly increase the risk of the open-end fund crashes, which remains valid after robustness tests. Further researches indicate that the market timing and stock selection abilities of fund managers weaken the positive impact of investor sentiment on the open-end fund crashes, and the market illiquidity promotes the positive impact of investor sentiment on the open-end fund crashes.

Keywords: Investor sentiment; Fund crashes; Market timing and stock selection abilities; Market illiquidity (search for similar items in EconPapers)
JEL-codes: C33 G11 G23 G41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:60:y:2022:i:c:s1062940822000213

DOI: 10.1016/j.najef.2022.101662

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