Factors Affecting Investment Decision Making of Equity Fund Managers

Wulfenia Journal, Vol 19, No. 10;Oct 2012

12 Pages Posted: 22 Aug 2018

See all articles by Ahmed Imran Hunjra

Ahmed Imran Hunjra

University of Waikato; Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Kashif Ur Rehman

IQRA University - Islamabad Campus

Salman Ali Qureshi

Allama Iqbal Open University - Department of Business Administration

Date Written: 2012

Abstract

Traditional theories of finance assume that investors use all available information and make rational investment decision but in reality the scenario is different. Based upon the growing importance of behavioral finance the present study is an attempt to investigate the effect of behavioral factors such as heuristics, risk aversion, use of financial tools and firm level corporate governance on the decision making of equity fund managers of Pakistan. The study collected response from 327 equity fund managers of insurance companies, commercial banks, and equity investment companies applying stratified random sampling technique. The results of the study demonstrate that a positive and significant relationship exist among heuristics, use of financial tools, risk aversion, firm-level corporate governance, and investment decision making. The results further demonstrate that firm-level corporate governance plays a pivotal role and is an important factor affecting investment decision making. Equity fund managers of institutions apply heuristics and financial tools while formulating their decisions. Equity fund managers of institutions are also found to be risk averse. Regulatory authorities and stock exchanges may use the results of the study. Regulatory authorities and exchanges may also use the results to create awareness by educating investors about the importance of behavioral factor and firm-level corporate governance. It may help to increase investors’ confidence.

Keywords: investment decision making, equity fund managers, firm level corporate governance, heuristics, risk aversion

Suggested Citation

Hunjra, Ahmed Imran and Rehman, Kashif Ur and Ali Qureshi, Salman, Factors Affecting Investment Decision Making of Equity Fund Managers (2012). Wulfenia Journal, Vol 19, No. 10;Oct 2012 . Available at SSRN: https://ssrn.com/abstract=3229650

Ahmed Imran Hunjra (Contact Author)

University of Waikato ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) ( email )

Muree Road Rawalpindi
Shamsabad, Punjab 44000
Pakistan
00923457162527 (Phone)

Kashif Ur Rehman

IQRA University - Islamabad Campus ( email )

5, Khayaban-e-Johar
Islamabad, H-9
Pakistan

Salman Ali Qureshi

Allama Iqbal Open University - Department of Business Administration

Sector H-8
Islamabad, Punjab 44000
Pakistan

Register to save articles to
your library

Register

Paper statistics

Downloads
96
Abstract Views
330
rank
278,550
PlumX Metrics