Local Values: Where Does Your Manager Live?
Johan Sulaeman, finance professor at SMU's Cox School of Business, co-authored research showing that stock funds run in disproportionally Catholic regions take on more risk.
By Janet Paskin
In search of the magical alchemy that makes some mutual funds better than others, academics have studied all kinds of variables, from the effects of a manager's scholarly pedigree to how a fund company pays its stockpickers. Now, a new study suggests the Pope may also play a role, though not quite in the way you might expect.
Stock funds run by companies in disproportionately Catholic areas take on more risk, on average, than comparable funds run by companies in "low-Catholic areas," according to researchers from the University of Georgia and Southern Methodist University. Funds run out of disproportionately Protestant areas take on lower risk, on average, than funds based in "low-Protestant" locales....
"There is no single explanation," says Johan Sulaeman, a finance professor in the business school at Southern Methodist University and one of the authors of the study. "You have complementary effects. You have the value of the location, the social value, and part of the risk profile is driven by the manager's own values."...