Professor Ning Zhu of Shanghai Advanced Institute of Finance (SAIF) at Shanghai Jiao Tong University, has published "Reaching for Yield: Evidence from Households" in the Journal of Financial Economics, a premier international finance journal. The research was conducted in collaboration with Francisco Gomes (London Business School), Cameron Peng (London School of Economics), and Oksana Smirnova (London Business School).

Research Overview

The study provides the first direct field evidence that individual investors exhibit "reaching for yield"—the tendency to increase investments in risky assets when interest rates decline. This behavior, previously documented only among institutional investors, demonstrates how retail investors respond to low-yield environments by seeking higher returns through increased risk-taking.

Using detailed transaction data from a large brokerage firm, the research reveals that this behavior is most pronounced among younger and less-wealthy individuals, consistent with theoretical models of portfolio choice incorporating labor income. The study also shows that reaching for yield intensifies when investors are trading at a loss, supporting predictions from prospect theory. Additionally, the authors identify and analyze the phenomenon of "reverse reaching for yield."

About Professor Zhu

Dr. Ning Zhu is a Professor of Finance at the Shanghai Advanced Institute of Finance (SAIF) at Shanghai Jiao Tong University. Previously, he held the position of Chair Professor at Tsinghua University and was a tenured Professor of Finance at the University of California. He also served as a Visiting Professor at Waseda University. From 2008 to 2010, Dr. Zhu worked as a Senior Executive at Lehman Brothers and Nomura Securities, leading teams that achieved top rankings in several institutional investor awards.

Professor Zhu's research interests encompass behavioral finance, Chinese macroeconomics and financial markets, short selling, bankruptcy and restructuring, corporate finance, and mergers and acquisitions. He has published over 50 articles in prestigious international journals, including the Review of Financial Studies, Journal of Finance, Management Science, and Journal of Legal Studies. Dr. Zhu is the author of the best-selling books The Guaranteed Bubble, The Investors' Enemy, and The Investors' Friend, which have been translated into multiple languages and gained widespread recognition. He was awarded the Sun Yefang Financial Innovation Book Award in 2018 and was included in the list of "China's Most Cited Scholars" by Elsevier in 2022.

Professor Zhu is a globally recognized expert on China's economy and financial system. He is a Faculty Fellow at Yale University, General Secretariat at the International Finance Forum, and Co-Secretary General of the International Financial Forum. Dr. Zhu has been invited as a guest speaker to the World Economic Forum in Davos, the Boao Forum for Asia, and other prominent events. He has also been interviewed by numerous domestic and international TV media outlets. Furthermore, Dr. Zhu has provided extensive consulting services to international organizations, governments, regulatory agencies, and major corporations worldwide.

Professor Zhu received his Ph.D. in Finance from School of Management, Yale University in 2003.