Geodesy

Benchmark (surveying)

Actuarial science

Collectivism

Uncertainty avoidance

Manager of managers fund

Closed-end fund

Ambiguity

Economics

Market economy

Computer science

Open-end fund

Fund of funds

Market liquidity

Business

Corporate governance

Individualism

Geography

Econometrics

Programming language

Institutional investor

Finance

Mutual fund

Ambiguity aversion

Journal of Corporate Finance

We study how culture influences mutual funds around the world. Uncertainty Avoidance (UA), which is related to ambiguity aversion, is negatively associated with flow-performance sensitivity, deviation from the fund benchmark, fund alpha, and the fraction of active management across the 25 countries in our sample. This is true even when controlling for an exhaustive set of fund- and country-level characteristics. We also find that a fund's deviation from its benchmark is not only affected by the UA of its domicile country but also by the UA of its fund family's country of origin. Our results highlight the importance of considering cultural characteristics, and UA in particular, when studying mutual funds across countries.

Uncertainty avoidance and mutual funds