The Exclamation Mark of Cain: Risk Salience and Mutual Fund Flows

Yevgeny Mugerman, Nadav Steinberg and Zvi Wiener

No 2019.09, Bank of Israel Working Papers from Bank of Israel

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 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.

Keywords: Mutual Funds; Regulation; Investor Attention; Investor Protection (search for similar items in EconPapers)
JEL-codes: G18 G23 G28 G41 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2019-07
New Economics Papers: this item is included in nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://boiwebrepec.azurefd.net/RePEc/boi/wpaper/WP_2019.09.pdf First version, 2019 (application/pdf)

Related works:
Journal Article: The exclamation mark of Cain: Risk salience and mutual fund flows (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:boi:wpaper:2019.09

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