Using the mutual fund industry as a laboratory, we demonstrate theoretically and empirically that economic policy uncertainty an affect investment decisions through an information rather than real options channel. Specifically, we find that fund flow-performance sensitivity decreases in...

This study examines the effect of economic policy uncertainty on mutual fund risk-shifting. Using Chinese mutual fund data from 2006 to 2020, we find that managers increase risk when uncertainty rises. A one-standard-deviation increase in EPU is associated with an 0.27- to...