Abstract
The target of this research is to reach an explanatory model for the behavior of mutual funds’ managers when taking the investment decision among various economic sectors. It tests the hypothesis that a significant relationship exists between the manager’s sector allocation decision and the return, risk and previous allocation to that sector using panel data analysis for a sample of 14 equity funds through the period from January 2007 till December 2011. Results suggest that fund managers tend to increase allocation to sectors with higher returns and decrease them to sectors with higher risks, but disproportionately. The sensitivity to risk is much higher than it is to return, showing that the prospect theory’s premises were true.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
