Local Religious Beliefs and Mutual Fund Risk-Taking Behaviors

We study the effects of local religious beliefs on mutual fund risk-taking behaviors. Funds located in low-Protestant or high-Catholic areas exhibit significantly higher fund return volatilities. Similar differences persist when we use the religiosity ratios at fund managers' college locations. Risk-taking associated with local religious beliefs manifests in higher portfolio concentrations, higher portfolio turnover, more aggressive interim trading, and more “tournament” risk-shifting behaviors, but not over-weighting risky individual stocks. Overall, our results suggest that local religious beliefs have significant influences on mutual fund behaviors. This paper was accepted by Brad Barber, finance.

• 저널Management Science · 58(10) · 1779–1796
• 토픽Islamic Finance and Banking Studies · Accounting
• DOI10.1287/mnsc.1120.1525
• 저자Tao Shu, Johan Sulaeman, P. Eric Yeung