The Performance of Overconfident Fund Managers

Using data for 193 equity funds in Taiwan, we examine whether fund managers behave overconfidently. We show that the higher the fund performance, the more that trading occurs in the next period. In addition, such trading may hurt subsequent performance, although the evidence is marginal. Our finding...

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Bibliographic Details
Published in:Emerging markets finance & trade 2011-03, Vol.47 (2), p.21-30
Main Authors: Chow, Edward H., Lin, Hsiao-Mei, Lin, Yo-Min, Weng, Yin-Che
Format: Article
Language:English
Subjects:
Confidence
equity fund
Equity funds
Finance
Investment advisors
Investment strategies
Investors
Mutual funds
Net assets
overconfidence
Portfolio management
Portfolio performance
Securities trading
Standard deviation
Studies
Trade
Trade finance
Vector autoregression
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Summary:Using data for 193 equity funds in Taiwan, we examine whether fund managers behave overconfidently. We show that the higher the fund performance, the more that trading occurs in the next period. In addition, such trading may hurt subsequent performance, although the evidence is marginal. Our findings suggest that managers of equity funds in Taiwan are overconfident.
ISSN:1540-496X
1558-0938
DOI:10.2753/REE1540-496X470202