52 Pages Posted: 17 Sep 2006 Last revised: 26 Jul 2012
Date Written: August 22, 2006
We analyze 16 mutual funds that are self-proclaimed or media-identified disciples of behavioral finance to determine whether: (a) they successfully attract investment dollars and (b) their strategies earn abnormal returns for their investors. We find these funds are successfully attracting investment dollars, outperform S&P 500 index funds, load especially heavily on the HML factor, but fail to earn risk-adjusted abnormal returns. Our results suggest behavioral mutual funds are tantamount to value investing and not much more.
Keywords: behavioral finance, behavioral mutual funds, market efficiency, mutual funds, behavioral investing
JEL Classification: G11, G12, G14
Suggested Citation: Suggested Citation
Wright, Colbrin and Boney, Vaneesha and Banerjee, Prithviraj, Behavioral Finance: Are the Disciples Profiting from the Doctrine? (August 22, 2006). Journal of Investing, Vol. 17, No. 7, 2008. Available at SSRN: https://ssrn.com/abstract=930400 or http://dx.doi.org/10.2139/ssrn.930400