A survey on the Brazilian Assets, its performance and the investing behavioral biases of its Investment Fund Managers

Abstract

Behavioral Investing Biases are cognitive and emotional aspects that may intervene in investment decisions. In order to search for evidences of behavioral biases in the Investment Fund Managers (IFM) in Brazil, a survey with 28 questions was created and sent to 936 IFM. 98 responses were obtained. Biases like Optimism and Regret Aversion were present in more than 75% of the respondents. Afterwards, performance of the investment funds managed by the respondents were also analyzed in terms of Excess Return on its benchmark. Finally, fund’s performance and IFM biases were crossed, confirming that top performance IFM tend to have less biases (only 4-5 average along 18 searched biases) and rarely present Recency or Representativeness(cognitive biases).