The occurrence and importance of pension fund managers’ investment beliefs A web survey and critical incident study

This paper examines the investment beliefs held by fund managers who run and analyse public and commercial pension funds. Previous research has shown that investment beliefs explain investment policies, strategies, and decisions. Using both quantitative web survey data (n=64) and qualitative interview data (n=22) based on the critical incident technique, this research analyses the importance of six investment beliefs that are generally assumed relevant to investment decisions. This research finds that both public and commercial pension fund managers attach significant importance to six investment beliefs: Rationality, Diversification, Long-term investment, Risk and return, Expertise, and Ability to control risk. However, public fund managers show stronger support for Diversification and Risk and return beliefs than commercial fund mangers. Evidence for these beliefs is particularly revealed in interviews on critical investment decisions. The paper concludes with a discussion on the relevance of this research to pension beneficiaries.