The Effects of Perceived Ticker Familiarity on ETF Investment

We investigate the link between ticker memorability and the exchange-traded fund (ETF) investment from 1993 through 2023. Issuers often favor salient trading symbols for marketing reasons. Ticker symbol selection is nonrandom consistent with the strategic adoption of salient tickers to capture retail interest and justify higher fees. Using our familiarity proxies, we find ticker memorability is strongly associated with higher liquidity, idiosyncratic risk, expense ratio, and retail ownership. Upgrades from non-memorable to memorable constitute the most common symbol change in our sample, exhibiting the largest post-change increases in liquidity and idiosyncratic risk. Results are robust to logit, fixed effects, correlated random effects, and difference-in-difference estimations.