This study analyzes whether investors take risks related to environmental, social and
governance (ESG) factors into account when making portfolio decisions. We exploit the new …

We show, using machine learning, that fund characteristics can consistently differentiate
high from low-performing mutual funds, before and after fees. The outperformance persists …

The interplay between investors' demand and providers' incentives has shaped the
evolution of exchange-traded funds (ETFs). While early ETFs invested in broad-based …

Climate change poses new challenges for portfolio management. In our not-yet-low carbon
world, investors face a trade-off between minimizing their exposure to climate risks and …

We examine the role of factor models and simple performance heuristics in investor decision-
making using Morningstar's 2002 rating methodology change. Before the change, flows …

We show that mutual fund ratings generate correlated demand that creates systematic price
fluctuations. Mutual fund investors chase fund performance via Morningstar ratings. Until …

We explore how mutual fund managers and investors react when the tradeoff between a
fund's sustainability and performance becomes salient. Following the introduction of …

Active equity funds care about fund size, affected by fund flows that obey a strong factor
structure with the common component responding to macroeconomic shocks. Funds hedge …

Target date funds (TDFs) are designed to provide unsophisticated or inattentive investors
with age‐appropriate exposures to different asset classes like stocks and bonds. The rise of …

ABSTRACT I demonstrate that skill and scale are mismatched among actively managed
equity mutual funds. Many mutual fund investors confuse the effects of fund exposures to …