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.”
-
A rise in gray divorce presents distinct planning challenges for advisors. A majority of married Americans say that a divorce would derail their retirement plan, a new Allianz Life study found.
July 25 -
Kurt Schacht is the executive director of the CFA Institute Systemic Risk Council. During his tenure he has overseen CFA Institute's global policy research, standards and government relations in New York, London, Brussels and Hong Kong. He managed the activities of the Global Investment Performance Standards, the CFA Institute Asset Manager Code and the Financial Analysts Journal.
July 25 -
Olivier Fines, CFA, is head of advocacy and policy research for EMEA at the CFA Institute. He leads the effort in researching and commenting on the major trends that affect the investment management industry as well as changes to the profession and policy and regulatory developments.
July 25
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.
