This
article is related are the Disciples profiting from the Doctrine? This arical presents colbywright,
prithviraj banerjee,And vaneesha boney. Behavioral finance has received a great deal of attention in
academia over the past 15 years or so leafier. Objective is to measure how much
acceptance and success behavioral finance is garnering in the practitioner
sphere. To do so, we begin by identifying 16 self-proclaimed or
media-identified “behavioral mutual funds” that implement a layer of behavioral
finance in their investment strategies. The self-proclaimed or media-identified
association of these 16 mutual funds with behavioral finance motivates at least
three practical questions. First, irrespective of their performance, are they
successfully attracting investment dollars—are any investors buying into the
notion of investing based on behavioral finance? Second, the key question, are
they actually earning abnormal returns? Third, if they are earning abnormal
returns, how do their investment strategies differ from matched, non-behavioral
firms?
This
article finding is the flow of funds into these behavioral funds is higher than
the flow of funds into index and matched actively managed, non-behavioral
funds, suggesting that behavioral mutual funds are effectively attracting
capital. They generally beat S&P 500
Index funds on a raw, net-return basis, which is not an easy task as shown in
numerous previous studies. Behavioral finance has gained substantial attention
in academia and seems to be gaining greater acceptance among practitioners.
