Chapter 8: Portfolio Managers

Financial Behavior: Players, Services, Products, and Markets. H. Kent Baker, Greg Filbeck, and Victor Ricciardi, editors, 135-152, New York, NY: Oxford University Press, 2017.

Posted: 6 Jun 2017

See all articles by Erik Devos

Erik Devos

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance

Andrew C. Spieler

Hofstra University - Department of Finance

Joseph Tenaglia

Independent

Date Written: June 1, 2017

Abstract

In the oversight of most funds, the portfolio manager holds the key decision-making power. Often regarded as foundational to the investment process, a few select managers can attract billions of dollars from investors, giving the managers increased prominence, credibility, and compensation. Despite their stature, portfolio managers are not immune to the behavioral biases that other investors exhibit, which can distort the portfolio management process. This chapter offers an overview of portfolio management and compares characteristics of the fund types that portfolio managers oversee. It also reviews several important behavioral biases that portfolio managers display, as well as the consequences that each has on portfolio construction: overconfidence, herd mentality, risk-taking behavior, and disposition effect. The chapter also contrasts the gender differences of portfolio managers and reviews the ramifications for their respective portfolios.

Keywords: behavioral finance, behavioural finance, portfolio managers, portfolio management, overconfidence, herd mentality, risk-taking behavior, disposition effect, gender differences

JEL Classification: A12, D81, G00, G30, G10, M00, M10, M41

Suggested Citation

Devos, Erik and Spieler, Andrew and Tenaglia, Joseph, Chapter 8: Portfolio Managers (June 1, 2017). Financial Behavior: Players, Services, Products, and Markets. H. Kent Baker, Greg Filbeck, and Victor Ricciardi, editors, 135-152, New York, NY: Oxford University Press, 2017.. Available at SSRN: https://ssrn.com/abstract=2980332

Erik Devos

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance ( email )

500 W. University Ave.
El Paso, TX 79968
United States
915 747 7770 (Phone)

HOME PAGE: http://utminers/utep.edu/hdevos

Andrew Spieler (Contact Author)

Hofstra University - Department of Finance ( email )

Hempstead, NY 11550
United States

Joseph Tenaglia

Independent ( email )

No Address Available

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