An Empirical Study of Existence of Behavioral Biases among mutual fund advisors and their Clients

Abstract

Behavioral biases not only affect the individual investors but also affect the mutual fund advisers. Over a period of time and after dealing with a large number of funds the mutual fund advisers feel that some of the funds have been consistently performing very well and they become biased towards them. Further, the mutual fund advisers have to control behavioral biases of their clients. This paper investigates the presence of behavioral biases among the mutual fund advisers and also the strategies with the help of which they control the behavioral basis of their clients. This paper determines whether the behavioral biases of mutual fund advisers are significant or not. The data has been collected from 38 mutual fund advisers. Statistical tools such as mean score and one sample t-test have been applied to analyze the data.