The use of trading strategies by fund managers: some first survey evidence

Lukas Menkhoff and Ulrich Schmidt

Applied Economics, 2005, vol. 37, issue 15, 1719-1730

Abstract: A questionnaire survey has found that most fund managers rely on the strategies of buy-&-hold, momentum and contrarian trading. These strategies are typically applied mutually. Their use is rooted in the attributes and beliefs of the respective fund managers: buy-&-hold traders are fundamentally oriented, risk averse and are less (over)confident than others. Momentum traders appear as the least risk-averse professionals, going aggressively with the trend. Contrarian traders, however, show signs of overconfidence and peculiar risk aversion, both indicating difficulties in successful strategy implementation. The behavioural patterns revealed are not easily reconciled with efficient markets.

Date: 2005
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DOI: 10.1080/00036840500217606

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