Publication Type

Journal Article

Version

publishedVersion

Publication Date

8-2022

Abstract

An abundance of evidence relates facial width-to-height ratio (fWHR) to masculine behaviors in males. We show that hedge funds operated by high-fWHR managers underperform those operated by low-fWHR managers, bear greater downside risk, are more susceptible to fire sales, and fail more often. High-fWHR managers compensate for their underperformance by marketing their funds more aggressively, thereby garnering higher flows and fee revenues. By exploiting major personal events that shape testosterone, namely marriage and fatherhood, we trace the biological mechanism underlying the relation between fWHR and investment performance to circulating testosterone. Our findings are robust and extend to equity mutual funds.

Keywords

hedge funds, alpha, facial width-to-height, testosterone, downside risk, fire sales, marriage, fatherhood, marketing intensity

Discipline

Finance and Financial Management | Portfolio and Security Analysis

Research Areas

Finance

Publication

Journal of Financial and Quantitative Analysis

Volume

57

Issue

5

First Page

1727

Last Page

1770

ISSN

0022-1090

Identifier

10.1017/S0022109021000399

Publisher

Cambridge University Press

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Additional Files
S0022109021000399sup001.pdf (222 kB)
Appendix

Additional URL

https://doi.org/10.1017/S0022109021000399

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