1,463
Views
6
CrossRef citations to date
0
Altmetric
Original Articles

Underperformance of Actively Managed Portfolios: Some Behavioral Insights

&

References

  • American Institute for Economic Research. 2016. “Is the Rydex S&P 500 Fund the Worst Mutual Fund in the World?” Retrieved from https://www.aier.org/blog/rydex-sp-500-fund-worst-mutual-fund-world
  • Ammann, Manuel, and Patrick Moerth. 2008. “Impact Fund of Size and Fund Flows on Hedge Fund Performance.” The Journal of Alternative Investments 11(1):78–96. doi:10.3905/jai.2008.708851
  • Arkes, Hal R. 1991. “The Costs and Benefits of Judgment Errors: Implications for Debiasing.” Psychological Bulletin 110(3):486–98. doi:10.1037/0033-2909.110.3.486
  • Arnott, Robert D., and Robert Ferguson. 1986. “Some Thoughts on Passive Management.” Financial Analysts Journal 42(5):78–80.
  • Asch, Solomon E. 1955. “Opinions and Social Pressure.” Scientific American 193(5):31–5. doi:10.1038/scientificamerican1155-31
  • Banerjee, A. 1992. “A Simple Model of Herd Behavior.” Quarterly Journal of Economics 107(3):797–817. doi:10.2307/2118364
  • Barber, Brad M., and Terrance Odean. 2001. “Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment.” The Quarterly Journal of Economics 116(1):261–92. doi:10.1162/003355301556400
  • Barberis, Nicholas, Andrei Shleifer, and Robert Vishny. 1998. “A Model of Investor Sentiment.” Journal of Financial Economics 49(3):307–43. doi:10.1016/S0304-405X(98)00027-0
  • Bennyhoff, D. G., and F. M. Kinniry. 2013. “Advisor’s Alpha.” Retrieved from https://advisors.vanguard.com/iwe/pdf/ICRAA.pdf
  • Bernard, Victor L., and Jacob K. Thomas. 1989. “Post-Earnings-Announcement Drift: Delayed Price Response or Risk Premium?” Journal of Accounting Research 27(Supplement):1–36. doi:10.2307/2491062
  • Bikhchandani, Sushil, David Hirshleifer, and Ivo Welch. 1992. “A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades.” Journal of Political Economy 100(5):992–1026. no. doi:10.1086/261849
  • Bogle, John C. 2005a. “The Mutual Fund Industry 60 Years Later: For Better or Worse?” Financial Analysts Journal 61(1):15–24. doi:10.2469/faj.v61.n1.2678
  • Bogle, John C. 2005b. “The Relentless Rules of Humble Arithmetic.” Financial Analysts Journal 61(6):22–35. doi:10.2469/faj.v61.n6.2769
  • Bogle, John C. 2005c. “In Investing, You Get What You Don’t Pay For.” Retrieved from https://www.vanguard.com/bogle_site/sp20050202.htm
  • Bogle, John C. 2011. “Common Sense Investing.” In The Harriman House Book of Investing Rules, edited by P. Jenks and S. Eckett, 56–64. London: Harriman House Ltd.
  • Bogle, John C. 2017. “The Road Not Taken.” Journal of Portfolio Management 44(1):83–90. no. doi:10.3905/jpm.2017.44.1.083
  • Brown, Stephen J., and William N. Goetzmann. 1995. “Performance Persistence.” The Journal of Finance 50(2):679–98. doi:10.1111/j.1540-6261.1995.tb04800.x
  • Buffett, Warren E. 1984. “The Super investors of Graham-and-Doddsville.” Hermes (Fall). Retrieved from https://www8.gsb.columbia.edu/sites/valueinvesting/files/files/Buffett1984.pdf
  • Buffett, Warren E. 1999. “Berkshire Hathaway Inc. An Owner’s Manual.” Retrieved from http://www.berkshirehathaway.com/owners.html
  • Camerer, Colin F. 2000. “Prospect Theory in the Wild: Evidence from the Field.” In Choices, Values and Frames, edited by D. Kahneman, and A. Tversky, 288–300. Cambridge: Cambridge University Press.
  • Carhart, Mark M. 1997. “On Persistence in Mutual Fund Performance.” The Journal of Finance 52(1):57–82. no. doi:10.1111/j.1540-6261.1997.tb03808.x
  • Chan, Louis K. C., and Josef Lakonishok. 2004. “Value and Growth Investing: Review and Update.” Financial Analysts Journal 60(1):71–86. doi:10.2469/faj.v60.n1.2593
  • Chang, Eric C., and Wilbur G. Lewellen. 1984. “Market Timing and Mutual Fund Investment Performance.” The Journal of Business 57(1):57–72. doi:10.1086/296224
  • Chen, Joseph, Harrison Hong, Ming Huang, and Jeffrey D. Kubik. 2004. “Does Fund Size Erode Mutual Fund Performance? The Role of Liquidity and Organization.” American Economic Review 94(5):1276–302. doi:10.1257/0002828043052277
  • Cohen, Randolph B., Joshua D. Coval, and Lubos Pastor. 2005. “Judging Fund Managers by the Company They Keep.” The Journal of Finance 60(3):1057–96. doi:10.1111/j.1540-6261.2005.00756.x
  • Constantinides, George, M. 1984. “Optimal Stock Trading with Personal Taxes: Implications for Prices and the Abnormal January Returns.” Journal of Financial Economics 13(1):65–9. doi:10.1016/0304-405X(84)90032-1
  • Coval, Joshua D., and Tyler Shumway. 2005. “Do Behavioral Biases Affect Prices?” The Journal of Finance 60(1):1–34. doi:10.1111/j.1540-6261.2005.00723.x
  • Cremers, K. J. Matijn, and Antti Petajisto. 2009. “How Active Is Your Fund Manager? a New Measure That Predicts Performance.” The Review of Financial Studies 22(9):3329–65. no. doi:10.1093/rfs/hhp057
  • Cumby, Robert E., and Jack D. Glen. 1990. “Evaluating the Performance of International Mutual Funds.” The Journal of Finance 45(2):497–521. doi:10.1111/j.1540-6261.1990.tb03700.x
  • Daniel, Kent, Mark Grinblatt, Sheridan Titman, and Russ Wermers. 1997. “Measuring Mutual Fund Performance with Characteristic-Based Benchmarks.” The Journal of Finance 52(3):1035–58. doi:10.1111/j.1540-6261.1997.tb02724.x
  • De Bondt, Werner F. M., and Richard H. Thaler. 1985. “Does the Stock Market Overreact?” The Journal of Finance 40(3):793–805. doi:10.1111/j.1540-6261.1985.tb05004.x
  • Deshmukh, Sanjay, Anand M. Goel, and Keith M. Howe. 2013. “CEO Overconfidence and Dividend Policy.” Journal of Financial Intermediation 22(3):440–63. doi:10.1016/j.jfi.2013.02.003
  • Edwards, Ward. 1982. “Conservatism in Human Information Processing.” In Judgment under Uncertainty: Heuristics and Biases, edited by D. Kahneman, P. Slovic and A. Tversky, 359–69. Cambridge: Cambridge University Press.
  • Elan, Seth L. 2011. “Financial Literacy Among Retail Investors in the United States. Securities and Exchange Commission (SEC).” Retrieved from https://www.sec.gov/news/studies/2012/917-financial-literacy-study-part2.pdf
  • Ellis, Charles D. 1995. “The Loser’s Game.” Financial Analysts Journal 51(1):95–100. doi:10.2469/faj.v51.n1.1865
  • Ellis, Charles D. 2011. “The Winners’ Game.” Financial Analysts Journal 67(4):11–7. doi:10.2469/faj.v67.n4.3
  • Ellis, Charles D. 2012. “Murder on the Orient Express: The Mystery of Underperformance.” Financial Analysts Journal 68(4):13–9. doi:10.2469/faj.v68.n4.2
  • Ellis, Charles D. 2014. “The Rise and Fall of Performance Investing.” Financial Analysts Journal 70(4):14–23. doi:10.2469/faj.v70.n4.4
  • Elton, Edwin J., Martin J. Gruber, Sanjiv Das, and Matthew Hlavka. 1993. “Efficiency with Costly Information: A Reinterpretation of Evidence from Managed Portfolios.” Review of Financial Studies 6(1):1–22. doi:10.1093/rfs/6.1.1
  • Elton, Edwin J., Martin J. Gruber, and Christopher R. Blake. 2012. “Does Mutual Fund Size Matter? the Relationship between Size and Performance.” Review of Asset Pricing Studies 2(1):31–55. doi:10.1093/rapstu/ras001
  • Ennis, Richard M. 1991. “Unraveling the Semantics of Investment: What Is Passive Management?” Financial Analysts Journal 47(4):6–15.
  • Ennis, Richard M. 2005. “Are Active Management Fees Too High?”. Financial Analysts Journal 61(5):44–51. doi:10.2469/faj.v61.n5.2755
  • Eun, Cheol S., Richard Kolodny, and Bruce G. Resnick. 1991. “U. S. Based International Mutual Funds: A Performance Evaluation.” Journal of Portfolio Management 17(3):88–94. doi:10.3905/jpm.1991.409337
  • Evans, Allison L. 2008. “Portfolio Manager Ownership and Mutual Fund Performance.” Financial Management 37(3):513–34. doi:10.1111/j.1755-053X.2008.00023.x
  • Fama, Eugene F. 1980. “Agency Problems and the Theory of the Firm.” Journal of Political Economy 88(2):288–307. doi:10.1086/260866
  • Fama, Eugene F., and Kenneth R. French. 1993. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33(1):3–56. doi:10.1016/0304-405X(93)90023-5
  • Fama, Eugene F., and Kenneth R. French. 1998. “Value versus Growth: The International Evidence.” The Journal of Finance 53(6):1975–99. doi:10.1111/0022-1082.00080
  • Fama, Eugene F., and Kenneth R. French. 2010. “Luck versus Skill in the Cross-Section of Mutual Fund Returns.” The Journal of Finance 65(5):1915–47. doi:10.1111/j.1540-6261.2010.01598.x
  • Fama, Eugene F., and Robert Litterman. 2012. “An Experienced View on Markets and Investing.” Financial Analysts Journal 68(6):15–9. doi:10.2469/faj.v68.n6.1
  • Fenton-O’Creevy, Mark, Nigel Nicholson, Emma Soane, and Paul Willman. 2003. “Trading on Illusions: Unrealistic Perceptions of Control and Trading Performance.” Journal of Occupational and Organizational Psychology 76(1):53–68. doi:10.1348/096317903321208880
  • Ferguson, Robert, Anna Agapova, Dean Leistikow, and Joel Rentzler. 2018. “Chasing Performance and Identifying Talented Investment Managers.” The Journal of Investing 27(1):52–64. doi:10.3905/joi.2018.1.067
  • Ferris, Stephen P., Robert A. Haugen, and Anil K. Makhija. 1988. “Predicting Contemporary Volume with Historic Volume at Differential Price Levels: Evidence Supporting the Disposition Effect.” The Journal of Finance 43(3):677–97. doi:10.1111/j.1540-6261.1988.tb04599.x
  • FINRA Investor Education Foundation. 2016. “Financial Capability in the United States 2016.” Retrieved from http://www.usfinancialcapability.org/downloads/NFCS_2015_Report_Natl_Findings.pdf
  • Fischhoff, Baruch. 1982. “Debiasing.” In Judgment under Uncertainty: Heuristics and Biases, edited by D. Kahneman, P. Slovic and A. Tversky, 422–44. Cambridge: Cambridge University Press.
  • Frazzini, Andrea, and Owen A. Lamont. 2008. “Dumb Money: Mutual Fund Flows and the Cross-Section of Stock Returns.” Journal of Financial Economics 88(2):299–322. doi:10.1016/j.jfineco.2007.07.001
  • Gärling, Tommy, Erich Kirchler, Alan Lewis, and Fred van Raaij. 2009. “Psychology, Financial Decision Making, and Financial Crises.” Psychological Science in the Public Interest 10(1):1–47. doi:10.1177/1529100610378437
  • Gärling, Tommy. 2011. “Heuristics and Biases Making People Rich or Poor – a Psychological account of Stock Market Anomalies.” In Perspectives on Thinking, Judging, and Decision Making., edited by W. Brun, G. Keren, G. Kirkeboen, and H. Montgomery, 146–56. Oslo: Universitetsforlaget.
  • Gillman, Barry, Erianna Khusainov, and Juan Mier. 2014. “The Predictive Power of Portfolio Characteristics.” Retrieved from http://ssrn.com/abstract=2539670
  • Gilovich, Thomas, Robert Vallone, and Amos Tversky. 1985. “The Hot Hand in Basketball: On the Misperception of Random Sequences.” Cognitive Psychology 17(3):295–314. doi:10.1016/0010-0285(85)90010-6
  • Gino, Francesca, Don A. Moore, and Max H. Bazerman. 2008. “No Harm, No Foul: The Outcome Bias in Ethical Judgments.” Working paper 08–080, Harvard Business School.
  • Goyal, Amit, and Sunil Wahal. 2008. “The Selection and Termination of Investment Management Firms by Plan Sponsors.” The Journal of Finance 63(4):1805–48. doi:10.1111/j.1540-6261.2008.01375.x
  • Graham, John R. 1999. “Herding Among Investment Newsletters: Theory and Evidence.” The Journal of Finance 54(1):237–68. doi:10.1111/0022-1082.00103
  • Grinblatt, Mark, and Sheridan Titman. 1989. “Mutual Fund Performance: An Analysis of Quarterly Portfolio Holdings.” The Journal of Business 62(3):393–416. doi:10.1086/296468
  • Grinblatt, Mark, and Sheridan Titman. 1993. “Performance Measurement without Benchmarks: An Examination of Mutual Fund Returns.” The Journal of Business 66(1):47–68. doi:10.1086/296593
  • Grinblatt, Mark, Sheridan Titman, and Russ Wermers. 1995. “Momentum Investment Strategies, Portfolio Performance, and Herding: A Study of Mutual Fund Behavior.” The American Economic Review 85(5):1088–105.
  • Grinold, Richard C., and Ronald N. Kahn. 1999. Active Portfolio Management, 2nd ed. New York: McGraw-Hill.
  • Gross, LeRoy. 1982. The Art of Selling Intangibles: How to Make Your Million ($) by Investing Other People’s Money. New York: New York Institute of Finance.
  • Gruber, Martin J. 1996. “Another Puzzle: The Growth in Actively Managed Mutual Funds.” The Journal of Finance 51(3):783–810. doi:10.1111/j.1540-6261.1996.tb02707.x
  • Herbert, Victor. 1980. “Informed Consent - A Legal Evaluation.” Cancer 46(S4):1042–4. doi:10.1002/1097-0142(19800815)46:4+<1042::AID-CNCR2820461330>3.0.CO;2-E
  • Hilbert, Martin. 2012. “Toward a Synthesis of Cognitive Biases: How Noisy Information Processing Can Bias Human Decision Making.” Psychological Bulletin 138(2):211–37. doi:10.1037/a0025940
  • Hirshleifer, David. 2001. “Investor Psychology and Asset Pricing.” The Journal of Finance 56(4):1533–97. doi:10.1111/0022-1082.00379
  • Hogarth, Robin M. 1975. “Cognitive Processes and the Assessment of Subjective Probability Distributions.” Journal of the American Statistical Association 70(350):271–89. doi:10.1080/01621459.1975.10479858
  • Hong, Harrison, Jeffrey D. Kubik, and Amit Solomon. 2000. “Analysts’ Career Concerns and Herding of Earnings Forecasts.” RAND Journal of Economics 31(1):121–44. doi:10.2307/2601032
  • Hu, Ping, Jayant R. Kale, Marco Pagani, and Ajay Subramanian. 2011. “Fund Flows, Performance, Managerial Career Concerns, and Risk Taking.” Management Science 57(4):628–46.
  • Huver, Tim. 2018. “Most Professionals Don’t Beat the Market. Will You?” Retrieved from https://www.vanguardcanada.ca/individual/articles/education-commentary/vanguard-voices/most-professionals-dont-beat-the-market.htm
  • Investment Company Institute. 2017. “2017 Investment Company Fact Book.” Retrieved from https://www.ici.org/pdf/2017_factbook.pdf
  • Jensen, Michael C. 1968. “The Performance of Mutual Funds in the Period 1945–1964.” The Journal of Finance 23(2):389–416.
  • Jensen, Michael C., and William H. Meckling. 1976. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics 3(4):305–60. doi:10.1016/0304-405X(76)90026-X
  • Kacperczyk, Marcin, Clemens Sialm, and Lu Zheng. 2005. “On Industry Concentration of Actively Managed Equity Mutual Funds.” The Journal of Finance 60(4):1983–2011. doi:10.1111/j.1540-6261.2005.00785.x
  • Kahneman, Daniel. 2011. “Don’t Blink! The Hazards of Confidence.” New York Times, October 23, 2011.
  • Kahneman, Daniel. 2013. Thinking, Fast and Slow. Toronto: Anchor House.
  • Kahneman, Daniel, and Mark W. Riepe. 1998. “Aspects of Investor Psychology.” Journal of Portfolio Management 24(4):52–65. doi:10.3905/jpm.1998.409643
  • Kahneman, Daniel, and Amos Tversky. 1979. “Prospect Theory: An Analysis of Decision under Risk.” Econometrica 47(2):263–92. doi:10.2307/1914185
  • Kahneman, Daniel, Jack L. Knetsch, and Richard H. Thaler. 1990. “Experimental Tests of the Endowment Effect and the Coase Theorem.” Journal of Political Economy 98(6):1325–48. doi:10.1086/261737
  • Kahneman, Daniel, Jack L. Knetsch, and Richard H. Thaler. 1991. “Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias.” The Journal of Economic Perspective 5(1):193–206. doi:10.1257/jep.5.1.193
  • Keillor, Garrison. 1985. Lake Wobegon Days. New York: Viking Press.
  • Kempf, Alexander, Stefan Ruenzi, and Tanja Thiele. 2009. “Employment Risk, Compensation Incentives, and Managerial Risk Taking: Evidence from the Mutual Fund Industry.” Journal of Financial Economics 92(1):92–108. doi:10.1016/j.jfineco.2008.05.001
  • Keynes, John Maynard. 1953. The General Theory of Employment, Interest and Money. New York: Harcourt Brace Jovanovich, Publishers.
  • Kinnel, Russel. 2010. “How Expense Ratios and Star Ratings Predict Success.” Retrieved from http://news.morningstar.com/articlenet/article.aspx?id=347327&part=1
  • Kinnel, Russel. 2015. “Does Manager Ownership Lead to Better Fund Performance?” Retrieved from http://www.morningstar.com/cover/videocenter.aspx?id=680232
  • Kirby, M. D. 1983. “Informed Consent: What Does It Mean?” Journal of Medical Ethics 9(2):69–75. doi:10.1136/jme.9.2.69
  • Khorana, Ajay, Henry Servaes, and Lei Wedge. 2007. “Portfolio Manager Ownership and Fund Performance.” Journal of Financial Economics 85(1):179–204. doi:10.1016/j.jfineco.2006.08.001
  • Kruger, Justin. 1999. “Lake Wobegon Be Gone! The “Below-Average Effect” and the Egocentric Nature of Comparative Ability Judgments.” Journal of Personality and Social Psychology 77(2):221–32. doi:10.1037/0022-3514.77.2.221
  • Kruger, Justin, and David Dunning. 1999. “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments.” Journal of Personality and Social Psychology 77(6):1121–34. doi:10.1037/0022-3514.77.6.1121
  • Lakonishok, Josef, and Seymour Smidt. 1986. “Volume for Winners and Losers: Taxation and Other Motives for Stock Trading.” The Journal of Finance 41(4):951–74. doi:10.1111/j.1540-6261.1986.tb04559.x
  • Lazear, Edward P., and Sherwin Rosen. 1981. “Rank-Order Tournaments as Optimum Labor Contracts.” Journal of Political Economy 89(5):841–64. doi:10.1086/261010
  • Leibenstein, H. 1950. “Bandwagon, Snob, and Veblen Effects in the Theory of Consumers’ Demand.” Quarterly Journal of Economics 64(2):183–207. doi:10.2307/1882692
  • Lowe, Janet. 2000. Damn Right!: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger. New York: John Wiley & Sons, Inc.
  • Malkiel, Burton G. 1995. “Returns from Investing in Equity Mutual Funds 1971 to 1991.” The Journal of Finance 50(2):549–72. doi:10.1111/j.1540-6261.1995.tb04795.x
  • Malmendier, Ulrike, and Geoffrey Tate. 2005. “CEO Overconfidence and Corporate Investment.” The Journal of Finance 60(6):2661–700. doi:10.1111/j.1540-6261.2005.00813.x
  • Malmendier, Ulrike, and Geoffrey Tate. 2008. “Who Makes Acquisitions? CEO Overconfidence and the Market’s Reaction.” Journal of Financial Economics 89(1):20–43. doi:10.1016/j.jfineco.2007.07.002
  • Mauboussin, Michael J. and Dan Callahan. 2013. “Outcome Bias and the Interpreter: How Our Minds Confuse Skill and Luck.” (2013, October 15). Retrieved from https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&source_id=csplusresearchcp&document_id=805810220&serialid=LA2K9fC4ZtnT%2BjFVIwRKtL2wUC%2F5a23Zkuk8wuWn4AE%3D
  • McDonald, John G. 1974. “Objectives and Performance of Mutual Funds, 1960–1969.” The Journal of Financial and Quantitative Analysis 9(3):311–33. doi:10.2307/2329866
  • Mitchell, Olivia S., Gary R. Mottola, Stephen P. Utkus, and Takeshi Yamaguchi. 2006. “The Inattentive Participant: Portfolio Trading Behavior in 401(k) Plans.” Retrieved from https://ssrn.com/abstract=1094834
  • Montier, James. 2006. “Behaving Badly.” Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=890563
  • Morningstar Manager Research. 2018. “U.S. Fund Fee Study.” April 26, 2018.
  • Moore, Don A., and Paul J. Healy. 2008. “The Trouble with Overconfidence.” Psychological Review 115(2):502–17. doi:10.1037/0033-295X.115.2.502
  • Morewedge, Carey K., Haewon Yoon, Irene Scopelliti, Carl W. Symborski, James H. Korris, and Karim S. Kassam. 2015. “Debiasing Decisions: Improved Decision Making with a Single Training Intervention.” Policy Insights from the Behavioral and Brain Sciences 2(1):129–40. doi:10.1177/2372732215600886
  • Narayanan, M. P. 1985. “Managerial Incentive for Short-Term Results.” The Journal of Finance 40(5):1469–84. doi:10.1111/j.1540-6261.1985.tb02395.x
  • Nofsinger, John R., and Richard W. Sias. 1999. “Herding and Feedback Trading by Institutional and Individual Investors.” The Journal of Finance 54(6):2263–95. doi:10.1111/0022-1082.00188
  • Odean, Terrence. 1998. “Are Investors Reluctant to Realize Their Losses?” The Journal of Finance 53(5):1775–98. doi:10.1111/0022-1082.00072
  • Otuteye, Eben, and Mohammad Siddiquee. 2015. “Overcoming Cognitive Biases: A Heuristic for Making Value Investing Decisions.” Journal of Behavioral Finance 16(2):140–9. doi:10.1080/15427560.2015.1034859
  • Pastor, Lubos, and Robert F. Stambaugh. 2002. “Mutual Fund Performance and Seemingly Unrelated Assets.” Journal of Financial Economics 63(3):315–49. doi:10.1016/S0304-405X(02)00064-8
  • Petajisto, Antti. 2013. “Active Share and Mutual Fund Performance.” Financial Analysts Journal 69(4):73–93. doi:10.2469/faj.v69.n4.7
  • Pikulina, Elena, Luc Renneboog, and Philippe N. Tobler. 2017. “Overconfidence and Investment: An Experimental Approach.” Journal of Corporate Finance 43(1):175–92. doi:10.1016/j.jcorpfin.2017.01.002
  • Pompian, Michael M. 2006. Behavioral Finance and Wealth Management. Hoboken: John Wiley & Sons, Inc.
  • Ram, Aliya. 2016. “Portfolio Managers Shun Investing in Own Funds.” The Financial Times, September 18, 2016. Retrieved from https://www.ft.com/content/2c910bce-7105.
  • Reynolds, Aaron S. 2011. “The Truth About Top-Performing Mutual Fund Managers.” American Association of Individual Investors (July). Retrieved from http://www.aaii.com/journal/article/the-truth-about-top-performing-mutual-fund-managers.mobile
  • Samuelson, William, and Richard Zeckhauser. 1988. “Status Quo Bias in Decision Making.” Journal of Risk and Uncertainty 1(1):7–59. doi:10.1007/BF00055564
  • Scharfstein, David S., and Jeremy C. Stein. 1990. “Herd Behavior and Investment.” American Economic Review 80(3):465–79. doi:10.1257/aer.90.3.705
  • Schrand, Catherine M., and Sarah L. C. Zechman. 2012. “Executive Overconfidence and the Slippery Slope to Financial Misreporting.” Journal of Accounting and Economics 53(1–2):311–29. doi:10.1016/j.jacceco.2011.09.001
  • Shariatmadari, David. 2015. “Daniel Kahneman: ‘What Would I Eliminate if I Had a Magic Wand?” The Guardian, July 18, 2015. Retrieved from https://www.theguardian.com/books/2015/jul/18/daniel-kahneman-books-interview.
  • Sharot, Tali. 2011. “The Optimism Bias.” Current Biology: Cb 21(23):R941–R945. doi:10.1016/j.cub.2011.10.030
  • Sharpe, William F. 1966. “Mutual Fund Performance.” The Journal of Business 39(S1):119–38. doi:10.1086/294846
  • Sharpe, William F. 1991. “The Arithmetic of Active Management.” Financial Analysts Journal 47(1):7–9. doi:10.2469/faj.v47.n1.7
  • Shefrin, Hersh, and Meir Statman. 1985. “The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence.” The Journal of Finance 40(3):777–90. doi:10.1111/j.1540-6261.1985.tb05002.x
  • Slovic, Paul, Sarah, Lichtenstein, and Baruch Fischhoff. 1988. “Decision Making.” In Stevens’ Handbook of Experimental Psychology, edited by R. C. Atkinson, R. J. Hernstein, G. Lindzey, and R. D. Luce, 673–738. New York: Wiley & Sons Inc.
  • Soe, Aye M., and Ryan Poirier. 2017. “SPIVA® U.S. Scorecard.” S&P Dow Jones Indices. Retrieved from https://us.spindices.com/documents/spiva/spiva-us-year-end-2016.pdf
  • Statman, Meir. 2011. What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions. New York: McGraw-Hill Education.
  • Statista. 2018a. “Total Net Assets of Mutual Funds in the United States from 1998 to 2016 (in trillion U.S. dollars).” Retrieved from https://www.statista.com/statistics/255518/mutual-fund-assets-held-by-investment-companies-in-the-united-states/
  • Statista. 2018b. “Number of Mutual Funds in the United States from 1997 to 2016.” Retrieved from https://www.statista.com/statistics/255590/number-of-mutual-fund-companies-in-the-united-states/
  • Svenson, Ola. 1981. “Are We All Less Risky Drivers and More Skillful than Our Fellow Drivers?” Acta Psychologica 47(2):143–8. doi:10.1016/0001-6918(81)90005-6
  • Taylor, Jonathon. 2004. “A Note on Closet-Indexing.” Journal of Economics and Business 56(6):431–41. doi:10.1016/j.jeconbus.2004.03.005
  • Thaler, Richard H. 1980. “Toward a Positive Theory of Consumer Choice.” Journal of Economic Behavior & Organization 1(1):39–60. doi:10.1016/0167-2681(80)90051-7
  • Thaler, Richard H. 1985. “Mental Accounting and Consumer Choice.” Marketing Science 4(3):199–214. doi:10.1287/mksc.4.3.199
  • Thaler, Richard H., and Cass R. Sunstein. 2008. Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven: Yale University Press.
  • Thaler, Richard H., Cass R. Sunstein, and John P. Balz. 2013. “Choice Architecture.” In The Behavioral Foundations of Public Policy, edited by E. Shafir, 428–39. Princeton: Princeton University Press.
  • Tversky, Amos, and Daniel Kahneman. 1981. “The Framing of Decisions and the Psychology of Choice.” Science 211(4481):453–8. doi:10.1126/science.7455683
  • Tweedy Browne Company. 1992. What Has Worked in Investing. New York: Tweedy Browne Company.
  • Vanguard Investments Canada Inc. 2017. “The Case for Index-Fund Investing for Canadian Investors.” Retrieved from https://www.vanguardcanada.ca/documents/cost_advantage_client.pdf
  • Wallick, Daniel W., Neeraj Bhatia, Andrew S. Clarke, Raphael A. Stern. 2011. “Shopping for Alpha: You Get What You Don’t Pay For.” Vanguard. Retrieved from https://personal.vanguard.com/pdf/icras.pdf
  • Weber, Martin, and Colin F. Camerer. 1998. “The Disposition Effect in Securities Trading: An Experimental Analysis.” Journal of Economic Behavior & Organization 33(2):167–84. doi:10.1016/S0167-2681(97)00089-9
  • Welch, Ivo. 1992. “Sequential Sales, Learning, and Cascades.” The Journal of Finance 47(2):695–732. doi:10.1111/j.1540-6261.1992.tb04406.x
  • Welch, Ivo. 2000. “Herding among Security Analysts.” Journal of Financial Economics 58(3):369–96. doi:10.1016/S0304-405X(00)00076-3
  • Wermers, Russ. 1999. “Mutual Fund Herding and the Impact on Stock Prices.” The Journal of Finance 54(2):581–622. doi:10.1111/0022-1082.00118
  • Wermers, Russ. 2000. “Mutual Fund Performance: An Empirical Decomposition into Stock-Picking Talent, Style, Transactions Costs, and Expenses.” The Journal of Finance 55(4):1655–95. doi:10.1111/0022-1082.00263
  • Wermers, Russ. 2003. “Are Mutual Fund Shareholders Compensated for Active Management Bets?” Working Paper, University of Maryland.
  • White, James, Jeffrey Rosenbluth, and Victor Haghani. 2017. “What’s Past is Not Prologue.” Retrieved from https://ssrn.com/abstract=3034686
  • Yan, Xuemin (Sterling). 2008. “Liquidity, Investment Style, and the Relation between Fund Size and Fund Performance.” Journal of Financial and Quantitative Analysis 43(3):741–67. doi:10.1017/S0022109000004270
  • Zweig, Jason. 1999. “The Velocity of Learning and the Future of Active Management.” Economic and Portfolio Strategy 1999:1–7.

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.