Retail investors are more likely to invest in funds run by attractive fund managers. So says a recent study, Is Beauty Skin Deep?, which collected photographs of managers and used an algorithm to rate their attractiveness.
Fund flows indicated investors “exhibit a bias for seemingly attractive mutual fund managers”, it noted.
It’s a somewhat odd result. After all, if you asked most investors the name of their fund manager or what they look like, they would likely respond: no idea.
Still, there’s no doubting that attractiveness pays. The study notes prior research showing attractive candidates fare better in elections; hiring managers call back attractive candidates more often; and companies run by more attractive chief executives enjoy larger stock-price reactions when they air positive news.
The conclusion: “Beauty is not just skin-deep; it is a sought-after attribute.”
