Do Institutional Investors Have Sensible Investment Beliefs?

10 Pages Posted: 23 May 2009

See all articles by Kees C. G. Koedijk

Kees C. G. Koedijk

Tilburg University - Department of Finance

Alfred Slager

Tilburg University - TIAS School for Business and Society

Date Written: May 20, 2009

Abstract

This article investigates the building blocks to successful investment strategies for institutional investors. It presents the results of a worldwide survey of investment beliefs, and finds striking differences in how pension funds and commercial asset managers view capital markets. Asset managers seem to use their investment beliefs to demonstrate their competitive advantage to current and potential clients. Pension funds, on the other hand, seem to use formulated investment beliefs as a tool for decision-making. We link investment beliefs to performance measures and find that pension funds with clear beliefs about asset pricing and risk diversification have better return/risk performance measures, as well as lower costs.

Keywords: Investment Beliefs, Investment Strategy, Pension Fund, Pension Fund Governance, Performance, Rotman

Suggested Citation

Koedijk, Kees G. and Slager, Alfred, Do Institutional Investors Have Sensible Investment Beliefs? (May 20, 2009). Rotman International Journal of Pension Management, Vol. 2, No. 1, 2009. Available at SSRN: https://ssrn.com/abstract=1408662

Kees G. Koedijk (Contact Author)

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 4663048 (Phone)
+31 13 4662052 (Fax)

Alfred Slager

Tilburg University - TIAS School for Business and Society ( email )

Warandelaan 2
TIAS Building
Tilburg, Noord Brabant 5037 AB
Netherlands

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