Open-end mutual funds have grown to become a key player in the corporate bond market. They invest in illiquid bonds but provide liquid claims to shareholders. Does such liquidity transformation introduce fragility to the corporate bond market? To address this question, we create a novel measure...

This paper investigates how firms' carbon emission levels affect the trading behavior of bond mutual funds. We find that mutual funds collectively sell corporate bonds issued by firms with high carbon emissions, driven by funds' concerns for carbon-related redemption risks and regulatory risks,...

Against the backdrop of COVID-19, we study how the interactions of mutual funds and dealers introduce fragility to the municipal bond market and carry lasting impacts. During the crisis, trading activities surge while dealers' liquidity provision plunges for mutual-fund-held bonds, leading to...