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Traumatic Childhood Events Make Mutual Fund Managers More Risk Averse

Traumatic Childhood Events Make Mutual Fund Managers More Risk Averse Decades Later, Study Finds

Traumatic childhood events can affect the investment decisions of mutual fund managers decades later, finds a study co-authored by Professor Raghavendra Rau at Cambridge Judge Business School.

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The study focuses on fund managers who experienced the death or divorce of a parent during their early years, concluding that such family disruption causes fund managers to be more risk averse and to invest less in “lottery-like” stocks.

These fund managers do not perform better or worse than peers who did not experience such childhood events, suggesting that affected fund managers tend to avoid both upside and downside risks.

The study is entitled “Till Death (or Divorce) Do us Part: Early-Life Family Disruption and Fund Manager Behavior”.

To see a summary of the study on the Cambridge Judge Business School website, including a link to the full study, please use this link: https://insight.jbs.cam.ac.uk/2019/ordeal-and-risk/

If you would like to contact Professor Raghavendra Rau, please email press-publicity@jbs.cam.ac.uk

Notes to Editors

About Cambridge Judge Business School

Cambridge Judge Business School leverages the power of academia for real-world impact to transform individuals, organisations and society.

Since 1990, Cambridge Judge has forged a reputation as a centre of rigorous thinking and high-impact transformative education, situated within one of the world's most prestigious research universities, and in the heart of the Cambridge Cluster, the most successful technology entrepreneurship cluster in Europe. The School works with every student and partner or client organisation at a deep level, identifying important problems and questions, challenging and coaching people to find answers, and creating new knowledge.

Cambridge Judge pursues innovation through inter-disciplinary insight, entrepreneurial spirit and collaboration. Cutting edge research is rooted in real-world challenges and students and clients are encouraged to ask excellent questions to create real-world change. Undergraduate, graduate and executive programmes attract innovators, creative thinkers, thoughtful and collaborative problem-solvers, and current and future leaders, drawn from a huge diversity of backgrounds and countries.