Authors: Matteo Crosignani, Lina Han, and Marco Macchiavelli
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Staff Reports
Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds
Number 1172
November 2025
November 2025
JEL classification: G12, F51, F38
Firm-level geoeconomic risk can affect even broadly diversified mutual fund portfolios. We study U.S. export controls that restrict sales of cutting-edge technology to selected Chinese firms for national security reasons. The stock prices of affected domestic suppliers drop immediately after the policy introduction. Mutual funds holding these stocks experience increased volatility and lower returns. Fund managers respond by selling stocks of exporters to China, buying lottery-like stocks, and increasing portfolio concentration. While stock-picking and market-timing skills do not help, specialist and high-fee funds are better at navigating geoeconomic risk.
Author Disclosure Statement(s)
Matteo Crosignani
I declare that I do not have relevant or material financial interests that relate to the research described in the paper titled “Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds.”
Lina Han
I declare that I do not have relevant or material financial interests that relate to the research described in the paper titled “Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds.”
Marco Macchiavelli
I declare that I do not have relevant or material financial interests that relate to the research described in the paper titled “Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds.”
I declare that I do not have relevant or material financial interests that relate to the research described in the paper titled “Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds.”
Lina Han
I declare that I do not have relevant or material financial interests that relate to the research described in the paper titled “Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds.”
Marco Macchiavelli
I declare that I do not have relevant or material financial interests that relate to the research described in the paper titled “Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds.”
Suggested Citation:
Crosignani, Matteo, Lina Han, and Marco Macchiavelli. 2025. “Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds.” Federal Reserve Bank of New York Staff Reports, no. 1172, November. https://doi.org/10.59576/sr.1172
Crosignani, Matteo, Lina Han, and Marco Macchiavelli. 2025. “Navigating Geoeconomic Risk: Evidence from U.S. Mutual Funds.” Federal Reserve Bank of New York Staff Reports, no. 1172, November. https://doi.org/10.59576/sr.1172
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