Behavioral funds’ performance based on season, MPS finds
Behavioral funds’ performance follows seasonal patterns, and tend to outperform more traditional funds in positive markets, according to research published by Italy’s Banca Monte dei Paschi di Siena.
The Italian bank run a survey on 16 equity funds with about $10bn assets under management, eight of which follow behavioral finance rules, and eight more traditional “growth and value” funds.
The research found that behavioral funds tend to outperform traditional funds in January, May and December. This was confirmed using the S&P 500 as a benchmark.
Behavioural funds also showed a better risk-adjusted return compared to traditional funds.