Forget lengthy disclosures. There’s nothing like punctuation to ward off investors.
According to Bank of Israel research published Tuesday, the simple addition of an exclamation mark to the names of some mutual funds led to significant declines in net flows as retail investors grew warier. The bank calls it the “Exclamation Mark of Cain.”
-
An increasingly popular form of lending enables financial advisors and their clients to offset capital gains and find other tax savings.
4h ago -
President Donald Trump is reportedly considering moving cannabis from a Schedule I to Schedule III substance. Experts say this could go a long way toward establishing the industry's legitimacy.
4h ago -
Michael Nathanson oversaw Focus Financial Partners as it reorganized into five internal hubs. Industry experts say the long overdue consolidation still has far to go.
5h ago
While conventional theories on decision-making hold that investment strategies should be made following rational analysis of qualities like risk, return, or fees, the research paper published Tuesday shows presentation can shape investment behavior.
The paper draws on a study of a 2010 Israel Securities Authority reform that required fund managers to add an exclamation mark to the names of mutual funds allowed to hold high-yield corporate bonds beyond their maximum exposure to equity investments. Only the risk salience was affected, not the fundamentals or information available.
However, the name change also created another impact.
Funds that added an exclamation mark boosted junk bond holdings significantly. “We leave
the further investigation of this behavior to future research,” the researchers wrote.
