The Appeal of Risky Assets

A fund's performance is usually compared to the performance of an index or other funds. If a fund trails the benchmark, the fund manager is often replaced. We argue that this may lead to excessive risk-taking if fund managers differ in ability and have the opportunity to take excessive risk. To match the benchmark, fund managers may increase the risk of their portfolio even if this decreases the expected return on the portfolio.

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Year of publication:	2010
Authors:	Stolper, Anno
Publisher:	München : Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
Subject:	Investmentfonds \| Führungskräfte \| Anlageverhalten \| Risikofreude \| Performance-Messung \| Benchmarking \| Ökonomischer Anreiz \| Theorie \| risk taking

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Series:	Munich Discussion Paper ; 2010-34
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.5282/ubm/epub.11878 [DOI] 641674015 [GVK] hdl:10419/104305 [Handle] RePEc:lmu:muenec:11878 [RePEc]
Classification:	G01 - Financial Crises ; G11 - Portfolio Choice ; G23 - Pension Funds; Other Private Financial Institutions
Source:	EconStor

Persistent link: https://www.econbiz.de/10010427567