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Retail investors are known to favor stocks with lottery‐like features and trade too much. Less is known about their intertemporal demand and risk‐taking behavior in lottery‐type stocks. We use intraday transaction data between September 2019 and June 2020 from the Stock Exchange of Thailand to test how individual's risk attitude changes with respect to decline in their wealth prospects during the COVID‐19 lockdown. The behavior of the investors supports a reference dependent preference. Confronted with lowered wealth prospects, retail investors substantially reduce their underweighting in nonlottery stocks while increasing overweighting and turnover frequency in lottery stocks resulting in deteriorating portfolio performance. [ABSTRACT FROM AUTHOR]

Retail investors' gambling preferences can affect the performance and turnover of IPO firms. Research on the relationship between IPO underperformance and turnover from the gambling preference perspective is very limited. Empirical results on gambling preferences show that it leads to the underperformance of IPO firms. IPO underperformance disappears after controlling for gambling preferences or turnover. For stocks with low gambling preferences, IPO underperformance and the turnover effect are almost negligible. They become significantly stronger as gambling preferences increase. It illustrates that turnover's impact on IPO underperformance essentially comes from gambling preferences. [ABSTRACT FROM AUTHOR]

Purpose: The present study delves into the causes of relatively lower retail participation in the Indian REIT market. Specifically, it investigates investors' attitudes and perceptions towards REITs as a unique asset class. This paper provides a comprehensive understanding of the perception and factors influencing Indian retail investors' reluctance to participate in the REIT market. Design/methodology/approach: Qualitative research was conducted through semi-structured interviews to gather insights from non-investors in REITs. The data were transcribed and analyzed using content analysis techniques. Finally, coding techniques were used to identify broad study themes. Findings: According to the study results, many retail investors are unfamiliar with REITs. Even among those knowledgeable about REITs and with a favorable view, it is not commonly seen as a feasible investment option due to its early stage, unattractive returns and limited number of REITs. Practical implications: Developed countries have established REIT markets, while it is still in its infancy in developing countries such as India. Financial advisors, fund houses and the media should focus on educating investors to increase awareness. Originality/value: The study is the first qualitative investigation into the perception of retail investors to understand the reasons for lower retail engagement in the Indian REIT market. [ABSTRACT FROM AUTHOR]

We examine the effects of stock market access, and in particular trading hours, on retail investment performance. Using discontinuities around time zone borders, we find that plausibly exogenous decreases in waking trading hours are associated with meaningful increases in retail investors' capital gains, as reported on tax returns for the U.S. population. Our results indicate that limiting trading hours curbs active retail trading, leading to improvements in portfolio performance. Our findings identify one negative effect of decreasing barriers to entry for retail investors in trading markets. JEL Classifications: M41; M48; G40; G51. [ABSTRACT FROM AUTHOR]

A developed and vibrant corporate bond market provides an important means of financial resources to corporate, in addition to bank financing. It brings transparency and prudence into financial system and helps in minimizing risks in financial system through diversification. The main objective of this study is to find out the various issues and hurdles faced by retail investors and come out with appropriate suggestions in this regard. A modest attempt has also been made to understand the present status of the Indian corporate bond market in reference to retail investors participation. The study reveals that, in spite of sincere efforts of policymakers, the participation of retail investors in Indian corporate bond market are negligible. It has also been observed that the important issues of retail investors are related to safety of principal, returns, liquidity and tax benefits. It is expected that the suggestions made in this paper, if implemented, will definitely helpful in attracting retail investors to Indian corporate bond market.

We first provide evidence of investor inattention to a very simple and well-known capital gains tax exemption in the Brazilian stock market. We then show that inattentive investors exhibit worse trading performance and stronger trading biases even after controlling for several investor-level variables, such as past trading experience. The evidence is consistent with inattention being one of the explanations for the prevalence of behavioral biases. This paper was accepted by David Sraer, finance. Funding: F. Chague and B. Giovannetti gratefully acknowledge financial support from Conselho Nacional de Desenvolvimento Científico e Tecnológico. Supplemental Material: The internet appendix and data are available at https://doi.org/10.1287/mnsc.2021.02516. [ABSTRACT FROM AUTHOR]

Innovation sustainability is essential for businesses to maintain their competitive edge and ensure long-term growth. This not only benefits individual companies but also entire industries. Despite its importance, research on retail investors' preferences for innovation sustainability remains limited. To address this gap, we analyzed unique data on shareholder numbers in listed Chinese companies from 2007 to 2020. We differentiate between institutional and retail investors to analyze the latter's preferences. This finding indicates that retail investors prefer to invest in companies with higher innovation sustainability. This preference stems from their limitations in capabilities of information collection, analytical skills, and risk diversification. The clientele effect is more pronounced when companies face a poor innovation environment, an opaque information environment, and a weak political connection. This study contributes to the existing literature by providing empirical support for the clientele effect and shedding light on retail investors' preferences and investment behavior. By focusing on company fundamentals, our study extends the examination of the clientele effect to the corporate governance level. These insights have significant implications for promoting sustainable development, impacting both companies and the capital market. [ABSTRACT FROM AUTHOR]

The economic effect of climate hazard events varies by time and by location. This paper investigates how climate shocks to local property markets transmit to capital markets and provides evidence of the extent to which forward‐looking climate risk is capitalized into the public valuations of those property markets. We first quantify the exposure of real estate portfolios to locations that recently experienced climate events (Event Exposure). Using an event study framework, we find that, in the post‐event period, a one‐standard‐deviation increase in ex‐ante Event Exposure is associated with a 0.2–1.4 percentage points decrease in quarterly stock returns. Cross‐sectional analyses reveal that differences in return effects can be explained by variation in the extent to which the area focuses on climate change. Similarly, we find that forward‐looking climate risk assessment negatively affects firm valuations only in markets with a focus on climate change. Consistent with these findings, we provide evidence that climate events (shocks) induce retail investors (noise traders) to decrease their stock holdings and that blockholders tend to take the opposite side in these transactions. We also show that conditioning on consumer sentiment helps to explain cross‐sectional variation in the response of stock returns to climate events. [ABSTRACT FROM AUTHOR]

Using marketable order flow data, we analyze key characteristics of aggregate retail exchange‐traded fund (ETF) investing from 2010 to 2021, including allocations, holding period and investment performance. Retail traders allocate 12% more dollar volume to leveraged and inverse ETFs versus nonretail traders. Retail ETF trades distinctly increase with prior ETF returns, in contrast to contrarian stock trading. Estimated ETF holding periods are longer for retail investors versus nonretail. Finally, retail and nonretail ETF trades perform similarly over hypothetical holding periods up to one quarter. Overall, we provide policy‐relevant insights into retail investing behaviours, which have been the subject of recent concern. [ABSTRACT FROM AUTHOR]

Retail investors in Indonesia are often influenced by psychological biases in making investment decisions. These biases, including heuristic and herding behaviors, often create a fear of missing out on key moments (FoMO) that impact investment decisions. This study aims to analyze the influence of heuristic behavior (representativeness bias, availability bias, anchoring bias) and herding behavior on investment decisions with FoMO mediation. The research used a survey method with 109 retail investor respondents and data analysis using smartPLS. The results show that herding behavior significantly affects FoMO, and FoMO also has a significant impact on investment decisions. In contrast, heuristic behavior has no significant influence on FoMO. These findings reinforce FoMO's role in the investment decision-making process among retail investors. Based on the results of data analysis from the hypothesis test, it can be concluded that heuristic behavior (representativeness bias, availability bias, and anchoring bias) does not affect the FoMO of retail investors in Indonesia. So any change in heuristic behavior (representativeness bias, availability bias, and anchoring bias) does not affect the FoMO of retail investors in Indonesia. [ABSTRACT FROM AUTHOR]

We analyze retail order flow in terms of intraday feedback trading patterns. Using a unique data set of exchange trades and high‐frequency quotes, we first provide evidence that retail investors actively and consciously respond to short‐term intraday returns in a negative feedback, contrarian fashion. Second, we show that some retail investors also feedback trade on tick‐by‐tick returns. Third, we find that on average this behavior leads to significant losses on the day they open a position. These losses are primarily due to the bid‐ask spread and to investors' timing inability, but not to market makers taking advantage of investors. [ABSTRACT FROM AUTHOR]

The green bond has emerged as an important financial instrument to advance environmentally friendly projects. While institutional investors have shown ample interest in green bonds, retail investors have lagged in their adoption. This study intends to examine the determinants of retail investors' attitude and intention toward green bond investment, utilizing the theory of planned behavior as the fundamental model and incorporating several context‐specific factors. Data from 506 Indian retail investors, representing the majority of Indian states and union territories (UTs), were collected through multi‐stage stratified random sampling. The PLS‐SEM method, coupled with artificial neural network (ANN) analysis and fuzzy set qualitative comparative analysis (fsQCA), was employed to test the hypothesized relationships, ensure the robustness of outcomes, and derive important practical insights. The findings suggest that intrinsic factors (perceived behavioral control and attitude) are superior predictors of investors' behavioral intentions relative to external factors (government policy support and social influence). Further, for green bonds to receive favorable evaluations from investors, they should display adequate financial cum environmental performance. Investors' attitude is significantly influenced by issuers' ratings and their willingness to pay premiums. Environmental concerns and perceived risk also influence investors' attitude toward green bonds, albeit with relatively lower strength. This study holds significance as it offers crucial implications for researchers, market participants, policymakers, and regulators involved in the development of the green bond market. [ABSTRACT FROM AUTHOR]

This study examines the correlation between fundamental financial metrics and stock returns of Indonesia's LQ45 Index over a 10-year period (2014-2023). The study aims to provide actionable insights for investors and companies by identifying the most critical financial metrics in predicting stock price movements. By analyzing data from 16 consistently listed Indonesian companies, the study focuses on stocks that have consistently maintained their position in the index over the past decade, a gap that has been underexplored in prior research. The study employs various statistical tests to validate the regression model, with hypothesis testing conducted through t-test and Ftests to determine the significance of financial ratios on stock returns. The analysis shows that Return on Equity, Price to Earnings Ratio (PER), Price to Book Value (PBV), Free Cash Flow per Share to Price (PFCF), and Dividend Payout Rate (DPR) have a significant positive effect on stock return. The research recommends that retail investors prioritize the PFCF ratio when evaluating potential stock investments. Transparency in financial reporting is essential, with companies encouraged to provide accurate and comprehensive financial statements, including clear reporting of key financial metrics, to build investor confidence. [ABSTRACT FROM AUTHOR]

We examine five summer Olympics and identify stocks that media outlets hype as benefiting from the Olympics (Olympic stocks). There is a seven-year period from the time that a country first learns it has won the Olympic bid to the start of the games (Olympic time period). We predict that the excitement of the Olympics along with the greater media attention impacts the valuation and risk of Olympic stocks. Consistent with this prediction, we show that Olympic stocks earn higher returns than their matched counterparts and comove more strongly with each other over the Olympic time period. Olympic stocks also exhibit increases in trading volume and stock volatility on days when media outlets have stories linking the firm to the Olympic Games. However, we find no evidence that the Olympic Games translate into stronger fundamentals for Olympic firms or stronger fundamental comovements. These findings suggest that investors are not purchasing the stocks based on an analysis of fundamentals, but are purchasing them based on their Olympic attribute. To confirm that event-based groupings occur in other settings, we show that comovement increases for stocks classified by the media as "stay-at-home" stocks at the start of the COVID-19 pandemic. This paper was accepted by Eric So, accounting. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2021.02218. [ABSTRACT FROM AUTHOR]

This paper explores the effects of incidental guilt on Socially Responsible Investment (SRI) decisions of retail investors. Do investors who feel guilty invest more in SRIs to clear their conscience? Are guilty investors willing to sacrifice returns to restore their moral selves? Using survey data from an online quasi-experiment among a sample of US retail investors, we find that individuals who experience incidental guilt are willing to invest more in SRI funds than those in a neutral state. We show that this effect, albeit moderate in magnitude, cannot be explained solely by differences in retail investors' moral reasoning, attitudes towards social responsibility, risk tolerance and demographic factors. When presented with a trade-off between sustainability, risk and return characteristics of the funds, guilty investors are more willing to sacrifice returns for greater sustainability than non-guilty participants. Our research provides new evidence of the effect that incidental guilt has on the sustainable investing decisions of retail investors. [ABSTRACT FROM AUTHOR]

Many households struggled both physically and financially during the COVID-19 crisis. In a time of such uncertainty, one might expect households to respond differently to financial instruments considered risker than others. Given the nature and general feelings around cryptocurrency, we expected there might be differences in how households that owned cryptocurrencies fared during the COVID-19 crisis as compared to those that did not own cryptocurrency. Our research found that cryptocurrency-owning households reported fewer financial challenges during the pandemic than households that did not own cryptocurrency. Specifically, they were less likely to experience food insecurity or miss payments on a variety of bills, including medical expenses and utilities. Crypto households experienced less unemployment, as both the head of the household and the partner more readily adapted to working from home. Crypto households were also less likely to experience death from COVID-19 than their counterparts were. Data from the Federal Reserve’s 2022 Survey of Consumer Finances (SCF) reveal that cryptocurrency-owning households in fact fared better than those who did not. The linear probability model results hold after correction for data imputation and controlling for financial literacy, willingness to take risks in the short- and long-term, income, wealth, gender, age, education level, work status, and race. These findings suggest a counternarrative to the mainstream opinion of cryptocurrency owners as risk-loving, irrational, retail day traders. This research contributes to the overall literature by showing households working with cryptocurrency make financially savvy decisions and are better off generally than their counterparts.

The study delves into the dynamics of wealth creation for retail investors in the context of Initial Public Offerings (IPOs) within the Indian equity markets. Against the backdrop of a burgeoning retail investor base, the research offers a comprehensive analysis spanning April 2012 to December 2022, evaluating short-term and long-term IPO performance metrics. The study reveals nuanced insights into wealth creation dynamics by scrutinizing listing day returns, firstweek to third-year returns, and market-adjusted returns vis-à-vis the Nifty50 Index. Notably, the research suggests that while IPOs exhibit promise with positive listing day returns, sustaining growth over extended horizons poses challenges. The hypothesis of inflation serving as a pragmatic hurdle rate for retail investors is explored, offering a novel perspective on wealth preservation. It also sheds light on the significant variability in the Real Rate of Returns (RRRs) among IPOs, with some contributing to wealth generation while others result in wealth erosion. This underscores the importance of retail investors carefully assessing and managing risks, emphasizing the need for prudent portfolio diversification and effective risk mitigation strategies, particularly over longer investment horizons.

By writing this paper, we aim to follow the evolution of Romanian retail investors’ access to trading financial instruments and cryptocurrencies through online platforms or specialized applications. We will follow the historical evolution of the participation of Romanian retail investors in trading on the capital market, the way in which access to trading is achieved, focusing in particular on the impact brought by the emergence of online platforms and mobile applications on the field. We will analyze the increase in the number of individuals using these specialized trading platforms, the cost of trading, but also the impact that this wave of new investors has generated on the prices of financial instruments and cryptocurrencies traded. We will also follow the reaction of the financial supervisory authorities in relation to the phenomenon, on a wider European and American level. Last but not least, we will also analyze the recent reaction of the Romanian legislator to this new reality as well as the simplification attempts from the point of view of the declaration of taxable income resulting from the trading of financial instruments, indicating the financial advantages and disadvantages generated by the current legislation for the Romanian investor, natural person.

The functioning of the stock market is based on the availability of information. Many retail investors use a prescriptive form of decision-making (Hammond et al., 1998). Investment intermediaries are one of the influencing sources of information for a stock market investor. Thus, there is growing importance to the advisory function of various investment intermediaries Basing the help-seeking model of Joo & Grable (1999,2001), the present study develops a demographic and socio-economic profile of those investors who seek investment advice in India. Using the snowball sampling technique, data is collected from financial advice-seeking and non-seeking retail investors. Logistic regression analysis indicates that aged investors with more savings, large portfolio sizes, and high expected returns are the major seekers of financial advice. This study addresses the major institutional barrier financial advisory services face, i.e., consumer profiling and targeting (Westermann et al, 2020). It highlights the importance of delivering tailored financial advisory services. [ABSTRACT FROM AUTHOR]

We use account-level transaction data to examine trading styles and profitability in a leading derivatives market. Approximately 66% of active retail investors predominantly hold simple, one-sided positions in only one class of options, whereas institutional investors are more likely to use complex strategies. Hypothesizing that the complexity of trading styles reflects investors' skills, we examine the effect of options trading styles on investment performance. We find that retail investors using simple strategies lose to the rest of the market. For both retail and institutional investors, selling volatility is the most successful strategy. We conclude that these style effects are persistent and cannot be fully explained by systematic risk exposure. This paper was accepted by Lukas Schmid, finance. Funding: J. Hu acknowledges financial support from Lee Kong Chian Fellowship. A. Kirilova acknowledges financial support from the Spanish Ministry of Science and Innovation [Grant PID2021-128994NA-I00]. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.4916. [ABSTRACT FROM AUTHOR]

developed and vibrant corporate bond market provides an important means of financial resources to corporate, in addition to bank financing. It brings transparency and prudence into financial system and helps in minimizing risks in financial system through diversification. The main objective of this study is to find out the various issues and hurdles faced by retail investors and come out with appropriate suggestions in this regard. A modest attempt has also been made to understand the present status of the Indian corporate bond market in reference to retail investors participation. The study reveals that, in spite of sincere efforts of policymakers, the participation of retail investors in Indian corporate bond market are negligible. It has also been observed that the important issues of retail investors are related to safety of principal, returns, liquidity and tax benefits. It is expected that the suggestions made in this paper, if implemented, will definitely helpful in attracting retail investors to Indian corporate bond market. [ABSTRACT FROM AUTHOR]

In this paper, we conduct a detailed examination of the determinants of attitudes to financial risk among retail investors in six European countries (Belgium, France, Germany, Italy, Spain and the United Kingdom). We find that respondents from the United Kingdom and Belgium are the most risk tolerant while those from Spain are the least. We observe remarkable similarities in the distributions of risk tolerance across countries despite cultural differences and considerable variations in the extent to which risky investing is undertaken as a routine part of financial planning. We further show that country effects in the cross‐sectional variation of attitude to risk scores are swamped by the impacts of gender, salary and wealth, while financial knowledge and prior investment experience are much more important still. Our results have implications for regulators and those who wish to encourage European investors to consider going beyond bank savings and guaranteed products to more prevalent stock market investing in an era of negative real interest rates. [ABSTRACT FROM AUTHOR]

This article describes the GameStop short squeeze of January 2021, which was driven by retail investors from the online Reddit forum r/WallStreetBets. The short squeeze resulted in unprecedented market volatility and significant losses for institutional investors like hedge funds, leading to controversial trading restrictions by brokerages like Robinhood. This case study uses the GameStop saga to delve into key legal and ethical issues pertinent to an undergraduate business law class, including market manipulation, regulatory oversight/compliance, and conflicts of interest. It also examines fiduciary duties and class action lawsuits. By ex ploring these aspects, the study highlights the event's educational value in demonstrating many real-life examples of business law concepts while underscoring the need for robust regulatory frameworks in an era shaped by social media and technological advances. [ABSTRACT FROM AUTHOR]

By writing this paper, we aim to follow the evolution of Romanian retail investors' access to trading financial instruments and cryptocurrencies through online platforms or specialized applications. We will follow the historical evolution of the participation of Romanian retail investors in trading on the capital market, the way in which access to trading is achieved, focusing in particular on the impact brought by the emergence of online platforms and mobile applications on the field. We will analyze the increase in the number of individuals using these specialized trading platforms, the cost of trading, but also the impact that this wave of new investors has generated on the prices of financial instruments and cryptocurrencies traded. We will also follow the reaction of the financial supervisory authorities in relation to the phenomenon, on a wider European and American level. Last but not least, we will also analyze the recent reaction of the Romanian legislator to this new reality as well as the simplification attempts from the point of view of the declaration of taxable income resulting from the trading of financial instruments, indicating the financial advantages and disadvantages generated by the current legislation for the Romanian investor, natural person. [ABSTRACT FROM AUTHOR]

The derivative market is growing faster than capital markets in recent years. Investors' focus is moved towards the futures market rather than on the stock market. The involvement of individual investors has increased in the derivative market. In investing, biases lead investors to make irrational and emotional decisions. The study tracks how investors' behavioural biases influence their investment decisions and also analyses the moderating effect of "financial literacy" and "self-efficacy" in the derivatives market. The snowball sampling technique was used to collect the primary data from 125 investors from Coimbatore city. Factor Analysis, Multiple Regression, and Structural equation Model were used for analysis. The results revealed that Behavioural biases such as "Herding Behaviour", "Overconfidence" and "Mental Accounting" positively affect investing in the derivative market and the moderating variables "Financial Literacy", and "Self-Efficacy" directly influence the behaviour of the investors which in turn affects derivative trading. [ABSTRACT FROM AUTHOR]

This systematic literature review addresses a critical gap in the existing literature by providing one of the first comprehensive syntheses of retail investors' decision-making processes within the sustainable investment context, analyzing 70 empirical articles published in top-tier journals from 2014 to 2023. Utilizing the Antecedents-Decisions-Outcomes and the Theories-Contexts-Methods (ADO-TCM) organizing framework and integrating a consumer behavior perspective, we reveal intricate dynamics influencing investment choices. Notably, while behavioral intentions (60% of articles) and actual investment decisions (23%) are frequently studied, the literature lacks focus on post-investment behavior and decision consequences.Despite growing research interest in consumer sustainable investing, the literature predominantly focuses on high-income economies (63%). Interestingly, current research utilizes diverse theories but often concentrates on a few dominant ones. This review extends the ADO-TCM framework to the specific context of retail sustainable investing, highlighting the interaction of the consumer behavior lens with existing financial theories. This review offers a comprehensive overview and identifies research gaps to guide future explorations in this field. Moreover, the results provide actionable insights for policymakers and financial service providers, highlighting the potential of choice architecture to influence consumers’ sustainable investment decision-making.

The disposition effect is one of themost prominent and widely studied behavioral biases observed among investors. It describes the tendency to close out winning investments prematurely while holding on to losing ones for too long and is generally associated with reduced investment returns. Researchers have explored various debiasing strategies and interventions to mitigate the disposition effect and its detrimental impact on returns. We summarize a between-subject experiment with n = 132 UK participants testing the impact of an informational feedback-like intervention to mitigate the disposition effect, informing participants about the disposition effect. Moreover, we re-examine our intervention's impact in the follow-up measurements which are 2 weeks and again 3 months after the first measurement. We find our intervention to have a significant impact, reducing the disposition effect in the first measurement. In addition, we still find a significant impact of the intervention, reducing the disposition effect after 2 weeks, while no significant impact is observed at the 3-month point. While we find a higher disposition effect to be associated with lower returns for one measurement, the opposite is true for the other two measurements. Moreover, the intervention had a return reducing impact for one measurement and no significant impact for the other two. Overall, our study shows a promising intervention that may be readily deployed among retail investors with a somewhat lasting impact to mitigate the disposition effect. However, our study also shows that the relationship between the disposition effect and investment returns is nuanced. [ABSTRACT FROM AUTHOR]

Previous research shows that individual investors are attracted to stocks with high maximum daily returns in the previous month (MAX). We examine the underlying sources of this preference. In a discrete choice investment experiment, subjects prefer high-MAX stocks only if these stocks are speculative with a comparably high level of return volatility. However, after controlling for volatility, subjects no longer favor high-MAX stocks. Hence, individuals do not prefer higher maximum daily returns per se. We find additional support for these findings in the aggregate trading patterns of Robinhood retail investors. [ABSTRACT FROM AUTHOR]

Using an hourly data set on retail investor individual security positions from Robinhood Markets, we find no evidence that environmental, social, and governance (ESG) disclosures inform retail investors' buy and sell decisions. The response on ESG press release days by retail investors is indistinguishable from nonevent days. In contrast, these same investors make economically meaningful changes to their portfolios in response to non-ESG press releases, especially those that pertain to earnings announcements. We use stock return tests to show that there is economic content in ESG press releases, and we conduct subsample analyses showing that retail investors do not respond to the most salient and economically transparent ESG disclosures. Collectively, these tests suggest that a lack of economic content, a lack of visibility, and difficulty with investment integration are unlikely to explain our findings. This paper was accepted by Suraj Srinivasan, accounting. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.4822. [ABSTRACT FROM AUTHOR]

In an attempt to make money markets safer and more resilient, regulators have created new requirements for market participants. Money market funds are now required to file a new N-CR form if a significant event occurs: for example, fund financial support or liquidity fees. We investigate whether fund stakeholders respond to the N-CR filings. We find that investors do not respond to the N-CR filings. However, fund managers, who do not need the filings to learn of the financial support, reduce the weighted average life (WAL) of the funds and increase the daily liquidity available. These actions have real costs and our results suggest the costs outweigh the benefit of the newly required Form N-CR (N-CR) filing. [ABSTRACT FROM AUTHOR]

We examine whether impending government shutdowns affect money market fund (MMF) investors and managers. Research suggests that market participants place increased risk on US Treasury Bills around government shutdown periods. There are three sets of decision makers in our sample: retail MMF investors, institutional MMF investors, and MMF investment managers. We ask the question; as the country moves toward a federal government shutdown do investors exit MMFs and do MMF managers shorten their maturities? In general, we find that fund managers did little to respond to government shutdowns. Institutional investors withdrew funds from MMFs (both Government and Prime). Retail investors moved funds into MMFs and moved into both Prime and Government funds. [ABSTRACT FROM AUTHOR]

– The authors examined whether stocks with higher left-tail risk measures earn higher or lower futures returns. Specifically, the authors estimate the cross-sectional principal component of a battery of left-tail risk measures and analyze future returns on stocks with high principal component values. In contrast to finance theories on the risk–return trade-off relationship, the study results show that high left-tail risk stocks have lower future returns. This finding is robust to various left-tail risk measures and controls for other risk factors. Moreover, the negative relationship between the left-tail risk and returns is more pronounced for stocks that are actively traded by retail investors. This empirical result is consistent with behavioral theory that when investors make decisions based on experience, they tend to underweight the likelihood of rare events.

Recent and ongoing regulatory efforts of the European Commission have made sustainable investments a relevant topic for the broader public. Likewise, the economy itself and the financial markets within the European Union are in transition to support the overall goal of climate neutrality by 2050. Scientific research mostly focused on professional or institutional investors, hardly on retail investors. This study aimed to investigate whether there are significant gender differences in prospective retail investors' knowledge, experience, and preference for sustainable investment (SI). The research was based on data from a survey conducted by the Portuguese Securities Market Commission at the end of 2020, containing a general section on investments in securities as well as a section dedicated to sustainable investments. To test the hypothesis of equalness, chi-square tests were applied. In the second step, multinomial logit regression testing and marginal effects were computed to identify determinants of sustainable investment knowledge and experience. The results proved that there are gender differences in the knowledge of sustainable investing. Well-known gender differences in general investment knowledge and behavior were confirmed. [ABSTRACT FROM AUTHOR]

In 2010, the Municipal Securities Rulemaking Board proposed a rule change requiring the display of current credit ratings on the EMMA website, a centralized repository of municipal bond information. Before the rule change, current credit ratings were freely available on individual rating agencies' websites or on EMMA if municipalities provided relevant continuing disclosures, making it unclear whether the rule change would benefit investors. A difference-in-differences analysis reveals the rule change is associated with a 6–8 basis-point decrease in investor transaction costs. This effect is concentrated among the intended beneficiaries (retail investors) when credit risk information demand is high (long-maturity bonds) and current credit rating information on EMMA is low (no continuing disclosure of rating changes was provided on EMMA). The rule change appears to have helped retail investors become aware of current credit ratings by filling a disclosure gap on EMMA for municipalities without continuing disclosures of rating changes. [ABSTRACT FROM AUTHOR]