Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2018

We examine whether globalization may unintendedly allow financial institutions with low managerial skills to grow. Using a complete sample of global mutual funds, we find that low-skilled fund companies may strategically differentiate their products by launching new funds that track less-explored fo...
Keywords: Globalization, Cross-border capital flows, Mutual Funds, Skills, market efficiency
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Annual Conference

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Investment Finance

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May 2024

We show that mutual funds report their junior stakes in startups at 43% higher valuation than model fair values that consider multi-tier capital structures of startups. The latest-issued and most senior security is worth 48% more per share than junior securities held by mutual funds, implying that m...
Keywords: Startup financing, Startup valuation, Mutual funds, Venture capital, Fair value, Private valuation
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Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2017

Using transaction-level credit card spending from a large US financial institution, we show that disaggregated sales provide accurate and persistent signals of customer demand relevant to a firm’s stock pricing. After controlling for earnings and sales surprises, one inter-quintile increase in the...
Keywords: return predictability, informed investors, disaggregated sales, customer demand, Credit Cards, Consumption, Household Finance, financial institution, big data
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Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2015

We document a novel channel through which coordinated trading exerts externalities on financial markets. We study the impact of a financial advisory firm that recommends frequent reallocations between equity and bond funds to Chilean pension investors. The recommendations generate large and coordina...
Keywords: Coordinated Noise Trading, Pension Funds, Price Pressure
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Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2013

Participants in defined contribution (DC) retirement plans rarely adjust their portfolio allocations, suggesting that their investment choices and consequent money flows are sticky and not discerning. However, participants’ inertia could be offset by DC plan sponsors, who adjust the plan’s inves...
Keywords: Flow-Performance Sensititivity, Defined Contribution Pension Plans, Retirement Savings
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