Is Your Mutual Fund Politically Biased?

If there’s anything we’ve learned over the past few years, it’s that there’s a lot of political bias in this country.

- Anne Kates Smith

So maybe it shouldn’t come as a surprise that mutual fund managers are susceptible, too.

A recent study shows that managers tend to invest in companies run by executives who share their politics—to the detriment of their fund investors. Prior research has already shown that fund managers prefer stocks from their own countries, their own cities and states, and the states where they grew up.

The study was conducted by finance professors at San Diego State University and the University of Kansas and published in the Journal of Financial and Quantitative Analysis. The researchers looked at fund managers from 1,298 funds and executives of 16,655 firms in which the funds invested, culling political donation records from 1989 to 2016 to determine everyone’s political leanings.