This paper studies the role of investors' optimism about future economic growth in their investment decisions. Based on simple intuition, we argue that investors base their future investment decisions not only on asset-specific information, but also on their expectations about future economic...

This paper examines whether investors' optimism about the future economic growth affects their future investment decisions. Drawing from the insights of the theoretical literature on investment behavior, we argue that investors base their future investment decisions not only on asset-specific...

This paper aims at analysing the mortality patterns of hedge funds over the period January 1994 to May 2008. In particular, we investigate the extent to which a spillover of risk among hedge funds through redemptions and failures of other funds has affected the probability of fund failure. We...

We explore the trading decisions of equity mutual funds during ten periods of extreme market uncertainty. We find that mutual funds reduced their aggregate holdings of illiquid stocks. Exploring the drivers behind this result reveals that this is mainly driven by larger withdrawals from funds...

When assessing a fund manager's skill, sophisticated investors will consider all factors (priced and unpriced) that explain cross-sectional variation in fund performance. We investigate which factors investors attend to by analyzing mutual fund flows as a function of recent returns decomposed...

Exchange Traded Funds (ETFs) – tradeable investments that provide a return linked to an underlying index or basket of assets – are likely the most successful financial product since the 2008 crisis. Over the last decade they've experienced remarkable growth. Yet these products may also be...

We develop a unified model of the interactions among investors, fund companies and fund managers. We show that the interplay between a manager's incentives from her compensation structure and career concerns leads to a non-monotonic (approximately U-shaped) relation between her risk choices and...

This stochastic simulation analysis examines the risk characteristics of target-date funds focusing on the trade-offs between wealth creation and security. The dynamic portfolio adjustment of marketed target-date funds, with varied asset allocations, along age and various time horizons is shown....

Risk is an unavoidable situation. Both individuals and business entities are exposed to various types of risk on a daily basis. Since business conducts in contemporary market conditions are characterized by an increasingly higher level of insecurity, business entities have acknowledged the value...