Disposition effect in fund managers. Fund and stock-specific factors and the upshot for investors

Andreu, Laura; Ortiz, Cristina; Sarto, José Luis

doi:10.1016/j.jebo.2020.04.002

Cited by 15 publications

(8 citation statements)

References 37 publications

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“…Cici [21] and Rau [45] found evidence, in real life and in a laboratory-type experiment, respectively, that teams display a stronger disposition effect than individuals. Andreu et al [23], on the other hand, found no significant difference between the disposition effect in teams and in single managers.…”

Section: Results Structured By Management Characteristicsmentioning

confidence: 90%

“…Previous studies such as that of Cici [21] found consistent results when using average daily stock prices, based on the assumption that trades occur sometime during the reporting period, and when using the stock prices at the end of the reporting period, assuming trades occurs at the end of the reporting period. Following Andreu et al [23], we suppose all trades occur at the end of the month. Thus, we assume the purchase price or the sales price to be the price at the end of the month.…”

Section: Methodsmentioning

confidence: 99%

“…The purchase price is set as a reference point for appreciation or depreciation. The disposition effect is a robust and well-documented anomaly that was investigated both at investor level and at aggregate level, both empirically and experimentally (see Cici [21] for a pioneer study on the disposition effect of mutual fund managers, Summers and Duxbury [22] for an example of experimental study, and Andreu et al [23] as an example of a recent empirical study). The disposition effect has also been investigated in financial markets worldwide, for example, in the United States by Cici [21], in the United Kingdom by Richards et al [24], in France by Boolell-Gunesh et al [25], in Portugal by Leal et al [26], in Taiwan by Lee et al [27], and in China by Duxbury et al [28] and An et al [29].…”

Section: Introductionmentioning

confidence: 99%

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Do Socially Responsible Investment Funds Sell Losses and Ride Gains? The Disposition Effect in SRI Funds

et al. 2021

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An increasing percentage of the total net assets under professional management is devoted to ethical investments. Socially responsible investment (SRI) funds have a dual objective: building an investment strategy based on environmental, social, and corporate governance (ESG) screens and providing financial returns to investors. In the current study, we investigate whether this dual objective has an influence on the behavior of mutual fund managers in the realization of gains and losses. Evidence has shown that most investors in SRI funds invest in those funds primarily because of their social concerns. If the motivations of SRI managers align with those of SRI investors, SRI managers might then have more incentives than conventional managers to hold onto losing stocks if they feel their social value compensates for the economic loss. We hypothesize that SRI managers would be less prone to the disposition effect than conventional managers. Pertaining to the disposition effect, we do not find evidence of a difference in the behavior of SRI fund managers compared with that of conventional fund managers. Our results hold, even when considering market trends, management structure, gender, and prior performance.

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Section: Results Structured By Management Characteristicsmentioning

confidence: 90%

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Do Socially Responsible Investment Funds Sell Losses and Ride Gains? The Disposition Effect in SRI Funds

et al. 2021

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“…The study results confirm that satisfaction is the total perceived by investors towards the service. Investment is a form of betting made by investors to get the expected profit level (Andreu et al, 2020). The experience of novice investors also determines the process for obtaining satisfactory investment returns.…”

Section: Discussionmentioning

confidence: 99%

Disposition Effect: Does Investor Confidence Matter? Examining Service From Securities Brokerages

Yulianto¹,

Wijaya²

2023

J. Professional Business Review

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Purpose: This study aims to analyze the role of training program to develop novice investors confidence in buying a stock. Novice investors undergo dilemma to buy stock due to limited knowledge which resulting disposition effect. Research regarding disposition effect which associated with training for novice investors is still limited Theoretical framework: The disposition effect is the tendency when investors sell stocks that have the potential to experience future profits early, otherwise investors tend to hold stocks that have the potential to experience losses for too long so that investors tend to experience losses. Design/methodology/approach: The research using quantitative approach and employ purposive sampling method with a total sample of 192 respondents. Respondent criteria are novice investor and have limited knowledge in stock market. Each respondent is required to fill questionnaire to obtain data which consist of strongly disagree and strongly agree. Validity, reliability, and hypothesis testing is examined Findings: The results indicate investor training influence investor experience. The result also showed that the training program and investor experience impact investor confidence. The result implies investor need training and experience to reduce disposition effect. The result represents training program, investor experience, and investor confidence affect investor satisfaction Research, Practical & Social implications: The research is asserted that novice investor with limited experience and knowledge need do practice. Novice investor understanding to buy stock will develop investor confidence. Originality/value: The result elaborate training for novice to develop investor confidence and experience. The more experienced investor will reduce disposition effect. Previous research is lack of disposition effect elaboration and its implication on investor satisfaction.

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“…Estas decisiones de mantener o vender se toman sobre un punto de referencia que es el precio de compra, es decir, valoras las pérdidas o ganancias respecto a ese punto tal y como se define en la Teoría Prospectiva de Kahneman & Tversky (1979). Este efecto ha sido analizado y confirmado en varios mercados, a nivel de inversor individual y profesional (Cici, 2012;Summers & Duxbury, 2012;Andreu et al, 2020).…”

Section: ¿Cómo Opera El Efecto Disposición En Los Fondos Isr?unclassified

Inversión socialmente responsable: aspectos económicos y psicológicos en la gestión de fondos de inversión

Djampou

2023

BEE

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Los datos proporcionados por organismos tanto nacionales como internacionales revelan el interés creciente que los inversores particulares manifiestan hacia los fondos de inversiones sostenibles y responsables (ISR). Si bien desean rentabilidades positivas, dichos inversores esperan de esos fondos una inversión en activos que cumplen criterios ambientales, sociales y de gobierno corporativo (ASG). Estos criterios imponen una clara limitación en las estrategias que los gestores de fondos ISR pueden aplicar. ¿El doble objetivo financiero y ético implica un comportamiento diferencial de los gestores de fondos ISR? El propósito principal de este artículo es proporcionar una visión económica y psicológica de los ISR. Analizaremos desde la revisión bibliográfica si existen diferencias de rentabilidad entre fondos convencionales y fondos ISR e investigaremos la relación entre rentabilidad y flujo de dinero y la existencia del efecto disposición en ISR, con el fin de ofrecer a los gestores y a los inversores una visión global para sus tomas de decisiones financieras. Recibido: 06 julio 2022Aceptado: 21 julio 2022

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Disposition effect in fund managers. Fund and stock-specific factors and the upshot for investors

Cited by 15 publications

References 37 publications

Do Socially Responsible Investment Funds Sell Losses and Ride Gains? The Disposition Effect in SRI Funds

Do Socially Responsible Investment Funds Sell Losses and Ride Gains? The Disposition Effect in SRI Funds

Disposition Effect: Does Investor Confidence Matter? Examining Service From Securities Brokerages

Inversión socialmente responsable: aspectos económicos y psicológicos en la gestión de fondos de inversión

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