"Mutual fund managers would seem to possess myriad advantages over the
average individual investor: a business degree, a deep understanding of
corporate finance, and years of experience.
But you wouldn’t know it based on how their personal portfolios fare.
A new study
of mutual fund managers in Sweden found that that they “do not exhibit
superior security-picking ability” when managing their personal
portfolios, compared with similarly situated private citizens who also
invest for themselves.
Using detailed tax and investment information contained in Swedish
government data bases, researchers from the University of Notre Dame and
Michigan State University were able to link individual fund managers to
their personal equity portfolios and returns, which were then compared
with the returns of non-experts with similar socioeconomic
characteristics, such as education and age.
Based on the risk-adjusted returns for each group, the researchers
found that the fund managers’ personal equity portfolios – individual
company stocks and also the stock mutual funds they hold – performed no
better than the private investors’ equity portfolios."
Thanks to the Squared Away Blog: http://squaredawayblog.bc.edu/squared-away/investment-managers-are-human-too/
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