Saturday, August 09, 2008

Are Australian Investors Smart?

Some interesting research by Philip Gharghori, Charly Sujoto and Madhu Veeraraghavan published in the Australian Journal of Management, Vol. 32, No. 3, Special Issue, March 2008.

The ability of investors to select funds whose future performance is superior has been termed the smart money effect. The researchers examine the smart money effect on Australian superannuation funds. Specifically, they investigate whether Australian investors make smart choices in selecting funds.

The research fails to uncover any supporting evidence for a smart money effect in the Australian superannuation fund industry, concluding that Australian investors generally are not able to recognise high performing superannuation funds.