Be Skeptical of Asset Management Research

6 Pages Posted: 3 Sep 2021

See all articles by Campbell R. Harvey

Campbell R. Harvey

Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER)

Date Written: August 16, 2021


Incentives distort research findings. We now know that research findings favorable to the sponsor of the research should be discounted on the grounds of conflict of interest (e.g., tobacco companies or pharma companies). Is the same true in the field of finance? I argue that economic incentives distort outcomes in both academic and practitioner finance research. The problem is somewhat less severe in the practice of finance. An asset manager who overfits their backtest will likely underperform in live trading. As such, they will lose investors and suffer a damaged reputation. Asset management has no equivalent to academic tenure.

Keywords: Backtesting, overfitting, p-hacking, research misconduct, research culture, performance fees, trading strategies, alpha

JEL Classification: G11, G12, G14, G17, G40, C58

Suggested Citation

Harvey, Campbell R., Be Skeptical of Asset Management Research (August 16, 2021). Available at SSRN: or

Campbell R. Harvey (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7768 (Phone)


National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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