Facial Structure and Delegated Portfolio Management

58 Pages Posted: 18 Jan 2018 Last revised: 20 Jan 2020

See all articles by Yan Lu

Yan Lu

University of Central Florida - College of Business Administration

Melvyn Teo

Singapore Management University - Lee Kong Chian School of Business

Date Written: January 12, 2018

Abstract

Facial structure as encapsulated by facial width-to-height ratio (fWHR) maps onto masculine behaviors in males and may positively relate to testosterone. We find that hedge funds operated by high-fWHR managers underperform those operated by low-fWHR managers after adjusting for risk. Moreover, hedge funds with high-fWHR managers exhibit greater operational and downside risk, are more susceptible to fire sales, prefer lottery-like stocks, and fail more often. Nonetheless, by marketing their funds more intensively, high-fWHR managers garner higher inflows and harvest greater fee revenues. The negative relation between fWHR and investment performance is robust and also manifests in equity mutual funds.

Keywords: hedge funds, alpha, facial width-to-height, testosterone, marketing intensity

JEL Classification: G02, G23

Suggested Citation

Lu, Yan and Teo, Melvyn, Facial Structure and Delegated Portfolio Management (January 12, 2018). Available at SSRN: https://ssrn.com/abstract=3100645 or http://dx.doi.org/10.2139/ssrn.3100645

Yan Lu

University of Central Florida - College of Business Administration ( email )

PO Box 161400
Orlando, FL 32816
United States

Melvyn Teo (Contact Author)

Singapore Management University - Lee Kong Chian School of Business ( email )

50 Stamford Road
Singapore, 178899
Singapore
+65 6828 0735 (Phone)
+65 6822 0777 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
3,840
Abstract Views
31,814
rank
2,533
PlumX Metrics