Presentation Information
[1Yin-A-44]What Do Asset-Class “Colors” Reveal?Empirical Analysis of the visual features and mutual fund characteristics of prospectuses
〇Shingo Sashida1, Mitsuyoshi Imamura2, Kei Nakagawa3 (1. TRAILBLAZER inc., 2. Institute of Systems and Information Engineering, University of Tsukuba, 3. Graduate School of Business, Osaka Metropolitan University)
Keywords:
Mutual funds,Prospectuses,Visual features,Image analysis,Color usage
Financial regulators in many countries tightly control disclosure documents such as mutual fund prospectuses to protect investors, but rules mainly target what is written and how the text is organized. Visual design choices, especially color, are still largely left to each firm. Prior work in psychology, marketing, and behavioral finance shows that colors affect emotions, risk perception, and product choice, yet the evidence is mostly from lab experiments using artificial documents.
In disclosure documents, color may aid asset-class identification and information search, while decorative or inconsistent colors may add visual noise and increase visual complexity.
We study Japanese publicly offered mutual funds using images of prospectuses and sales documents. From these materials, we extract CIELAB-based color features, characterize asset-class–color associations, and construct a color-noise measure from residual palettes after excluding asset-class colors. Fund-level regressions with firm fixed effects relate these measures to fund characteristics. We find that asset-class colors are clustered in specific regions of color space. We also find that higher color noise is associated with higher fund risk and fees and with lower Sharpe ratios. Finally, much of the variation in color noise is explained by firm-specific templates and editorial policies.
In disclosure documents, color may aid asset-class identification and information search, while decorative or inconsistent colors may add visual noise and increase visual complexity.
We study Japanese publicly offered mutual funds using images of prospectuses and sales documents. From these materials, we extract CIELAB-based color features, characterize asset-class–color associations, and construct a color-noise measure from residual palettes after excluding asset-class colors. Fund-level regressions with firm fixed effects relate these measures to fund characteristics. We find that asset-class colors are clustered in specific regions of color space. We also find that higher color noise is associated with higher fund risk and fees and with lower Sharpe ratios. Finally, much of the variation in color noise is explained by firm-specific templates and editorial policies.