Using exogenous wealth shocks stemming from the collapse of the housing market, we show that managers who experience substantial losses in their home values subsequently reduce the risk in their delegated funds. The decline in fund risk comes through reductions in idiosyncratic risk and tracking...

We find that socially connected fund managers have more similar holdings and trades. The portfolio overlap of funds whose managers reside in the same neighborhood is considerably higher than that of funds whose managers live in the same city but in different neighborhoods. These effects are...

We show that familiarity affects the portfolio decisions of mutual fund managers. Controlling for fund location, funds overweight stocks from their managers' home states by 12% compared to their peers. In team-managed funds, home-state overweighting is 37% larger than the fund location effect....

Traditional finance explains individual investors' behavior and financial decision-making based on economic incentives and rationality. Modern finance, however, takes a holistic view and searches for not only economic but also biological, psychological, and social factors that shape...