Complex Instruments Have Increased Risk and Reduced Performance at Mutual Funds Available to Purchase

We thank Murray Carlson for providing us with data used in his study, the editor, Ivo Welch, and two anonymous referees for their constructive feedback, which helped improve the quality of the paper. We also want to thank George Aragon, Laurent Barras, Aaron Brown, Stéphane Chrétien, Jochen Lawrenz, Khaled Obaid, Franςois-Éric Racicot, Nicole Robitaille, Mikhail Simutin, and seminar participants at the Smith-Ivey Finance Workshop, the Ontario Managed Investment Research Group Workshop, the 2016 Telfer Annual Conference on Accounting and Finance, the 2017 American Law and Economics Association Annual Meeting, 2017 Financial Management Association Annual Meeting, the 2017 Meeting of the World Finance Conference, the 2018 European Financial Management Association Annual Meeting, and the 36th International Conference of the French Finance Association for their helpful comments. We also acknowledge the receipt of financial support from the Canadian Securities Institute Research Foundation and Hillsdale Investment Management through the 2020 Hillsdale Investment Management − CFA Society Toronto Research Award. Previous versions of this paper were circulated under the titles, “(Ab)Use of Complex Financial Instruments by Mutual Funds” and “Complex Instrument Allowance at Mutual Funds.”