Fund fragility: the role of investor base

Liquidity transformation by mutual funds renders them vulnerable to runs. Most recently, funds suffered large run-like outflows in March 2020 (Falato, Goldstein, and Hortaçsu, 2021), which threatened to de-stabilize broader financial markets (Haddad, Moreira, and Muir, 2021; Ma, Xiao, and Zeng, 2022; Vissing-Jorgensen, 2021) and led to large-scale central bank interventions (e.g., Breckenfelder and Hoerova, 2020)