Mortality, Demographic Changes, and Financial Market Outcomes

73 Pages Posted: 27 Dec 2022 Last revised: 16 Jul 2024

See all articles by Alok Kumar

Alok Kumar

University of Miami - Miami Herbert Business School

Ville Rantala

University of Miami - Department of Finance

Claudio Rizzi

University of Navarra - Finance

Date Written: August 18, 2023

Abstract

Motivated by the systematic liquidation patterns among the elderly, we examine whether mortality-induced demographic shifts affect mutual fund flows and stock returns. We find that fund flows are more positive during high mortality months, and this mortalityflow relation is stronger among funds that older investors prefer. At the state-level, mortality predicts municipal bond fund flows, especially in U.S. states with higher income and higher elderly proportion. Using newspaper obituaries to measure mortality, we find that high mortality exposure stocks earn abnormal returns following abnormal mortality months. Known seasonal patterns in fund flows and stock returns cannot explain these findings.

Keywords: Mortality, obituaries, aging, mutual fund flows, return predictability, household finance

JEL Classification: G11, G12, G14.

Suggested Citation

Kumar, Alok and Rantala, Ville and Rizzi, Claudio, Mortality, Demographic Changes, and Financial Market Outcomes (August 18, 2023). University of Miami Business School Research Paper No. 4310155, Available at SSRN: https://ssrn.com/abstract=4310155 or http://dx.doi.org/10.2139/ssrn.4310155

Alok Kumar (Contact Author)

University of Miami - Miami Herbert Business School ( email )

517B Jenkins Building
Department of Finance
Coral Gables, FL 33124-6552
United States
305-284-1882 (Phone)

HOME PAGE: http://sites.google.com/view/alokmiami/home

Ville Rantala

University of Miami - Department of Finance ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States

Claudio Rizzi

University of Navarra - Finance ( email )

08034 Barcelona
Spain

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