We study the effects of local religious beliefs on mutual fund risk‐taking behaviors. Funds located in low‐Protestant or high‐Catholic areas exhibit significantly higher fund return volatilities. Similar differences persist when we use the religiosity ratios at fund managers' college locations. Risk‐taking associated with local religious beliefs manifests in higher portfolio concentrations, higher portfolio turnover, more aggressive interim trading, and more ‘tournament’ risk‐shifting behaviors, but not over‐weighting risky individual stocks. Overall, our results suggest that local religious beliefs have significant influences on mutual fund behaviors.
