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The use of trading strategies by fund managers: some first survey evidence

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Author Info
Lukas Menkhoff
Ulrich Schmidt

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Abstract

A questionnaire survey has found that most fund managers rely on the strategies of buy-&-hold, momentum and contrarian trading. These strategies are typically applied mutually. Their use is rooted in the attributes and beliefs of the respective fund managers: buy-&-hold traders are fundamentally oriented, risk averse and are less (over)confident than others. Momentum traders appear as the least risk-averse professionals, going aggressively with the trend. Contrarian traders, however, show signs of overconfidence and peculiar risk aversion, both indicating difficulties in successful strategy implementation. The behavioural patterns revealed are not easily reconciled with efficient markets.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 37 (2005)
Issue (Month): 15 (August)
Pages: 1719-1730
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Handle: RePEc:taf:applec:v:37:y:2005:i:15:p:1719-1730

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Bruce Mizrach & Susan Weerts, 2006. "Highs and Lows: A Behavioral and Technical Analysis," Departmental Working Papers 200610, Rutgers University, Department of Economics. [Downloadable!]
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  2. Menkhoff, Lukas & Rebitzky, Rafael & Schröder, Michael, 2005. "Do Dollar Forecasters Believe too Much in PPP?," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover dp-321, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]
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  3. Beckmann, Daniela & Menkhoff, Lukas & Suto, Megumi, 2007. "Does Culture Influence Asset Managers? Views and Behavior?," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover dp-367, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]
    Other versions:
  4. Nikiforow, Marina, 2009. "Does training on behavioral finance influence fund managers' perception and behavior?," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover dp-419, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]
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