At noon on December 2, the eighth issue of "Noon Sunshine-Young Scholars Forum" was held in classroom 116 at School of Finance. The theme was "Do Mutual Funds Walk the Talk? A Textual Analysis of Risk Disclosure by Mutual Funds". Nan Xu, an assistant professor at School of Finance, presented her paper. She received her degree of PhD in Finance from University of California, Irvine. Her research interests  are mutual funds, institutional investors, empirical asset pricing, textual analysis, behavioral finance, etc. Han Xu, the secretary of the party committee of the school, and Liu Lanbiao, the deputy dean, attended the forum.

Tianyu Wang, an assistant professor at School of Economics and Management of Tsinghua University was the discussant. He received his degree of PhD in Finance from Imperial College London. . His research fields are asset pricing, financial institutions, and international finance. His papers have been published in top journals, such as The Journal of Finance, The Journal of Financial Economics, The Review of Financial Studies.

Nan Xu presented her recent working paper about mutual fund risk disclosure. Using textual analysis, the authors examined risk disclosures in funds’ summary prospectuses to determine whether funds do accurately disclose their risks. They first documented the types of risks disclosed by funds and then show that most of the disclosed risks can be linked to meaningful and well-known academic risk factors.. They found that the disclosed risks can explain about 80% of the variations in future returns on average. Also funds tend to over-disclose. About 50% of the disclosed risks are insignificant in explaining the variations in future returns. Finally the authors show that the informativeness of risk disclosure is related to fund characteristics, risk-taking behavior, and future performances, , but not to investors’flow.

Tianyu Wang commented that it is worthwhile to study this paper. He also provided suggestions on the assumptions, methodology, and empirical tests in the paper.

During the communication, the faculty and students asked questions actively. Everyone enjoyed the fun of academic research.

"Noon Sunshine" is a academic exchange platform built by School of Finance since establishment. It aims to help the faculty focus on academic frontier, to enhance academic exchanges, and to promote scientific research cooperation.

Copywriter: Liu Meiyan

Photography: Liu Xianglong, Yang Wenyu

Editor: New Media Center, School of Finance, Cai Xing

Reviewer: Ma Jin, Hao Ren