What's in a Name? Mutual Fund Flows When Managers Have Foreign-Sounding Names

Alok Kumar, Alexandra Niessen-Ruenzi, Oliver G. Spalt

Research output: Contribution to journalArticle

12 Citations (Scopus)

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.

Original languageEnglish (US)
Pages (from-to)2281-2321
Number of pages41
JournalReview of Financial Studies
Volume28
Issue number8
DOIs
StatePublished - Aug 1 2015

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Mutual fund flows
Managers
Investors
Investment choice
Mutual funds
Fund flows
September 11 attacks
Index funds
Clientele
Stereotypes

ASJC Scopus subject areas

  • Finance
  • Accounting
  • Economics and Econometrics

Cite this

What's in a Name? Mutual Fund Flows When Managers Have Foreign-Sounding Names. / Kumar, Alok; Niessen-Ruenzi, Alexandra; Spalt, Oliver G.

In: Review of Financial Studies, Vol. 28, No. 8, 01.08.2015, p. 2281-2321.

Research output: Contribution to journalArticle

Kumar, Alok ; Niessen-Ruenzi, Alexandra ; Spalt, Oliver G. / What's in a Name? Mutual Fund Flows When Managers Have Foreign-Sounding Names. In: Review of Financial Studies. 2015 ; Vol. 28, No. 8. pp. 2281-2321.
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