IBI Closes Mutual Fund Developed with Behavioral Economist Dan Ariely
IBI Investment House is closing its mutual fund launched with Prof. Dan Ariely after generating near-zero returns over five years and managing only 2 million shekels.
IBI Investment House is closing its mutual fund launched in partnership with behavioral economist Prof. Dan Ariely, after it generated near-zero returns over the past five years and accumulated assets of only 2 million shekels. The fund, named IBI D.A. Model, was established in 2018 and based on an investment model developed by Ariely and his research team. The liquidation will take effect on November 25.
Performance and Investment Strategy
According to the corporate announcement, the fund manages just 2 million shekels while charging a management fee of 1.35%. Since the beginning of the year, the fund generated a return of 7.2%, compared to a 12.35% increase in the S&P 500 index. Over the past five years, the fund lost 0.7% of its value, while the S&P 500 surged by 70.2%. The fund's investment policy was based on the theory that companies with long-term business success potential can be identified by analyzing their human capital, utilizing a database of hundreds of public companies primarily in the United States.
Background and Closure
Ariely is a globally renowned researcher in behavioral economics and a professor at Duke University, known for his bestselling books and research on human decision-making. However, in the past year, his reputation took a hit after a study he published 24 years ago was retracted due to data irregularities. IBI stated: "The investment model and business aspects of the fund were evaluated over a period. After the fund's activity did not develop as expected, the company decided to close it."
