Irrationality of Investor Behavior in the Russian Mutual Fund Market

The study examines the behaviour of Russian investors in the mutual fund market in terms of compliance with the classical financial assumption of rational agent behaviour. In the modern financial world, effective investing requires not only knowledge and experience, but also the ability to rationally assess risks and make informed decisions. Despite the development of financial literacy, investors are influenced by emotions and behavioural biases that can distort their investment decisions. The article discusses the theories of classical and behavioural finance and analyses investor behaviour in the mutual fund market under stable and unstable economic conditions. The study is based on quarterly data on unit costs and net asset values of 69 mutual funds in the period from January 2009 to October 2023. By building a panel regression model with different specifications, the authors test the hypotheses on the existence of irrational behaviour of investors in the Russian mutual fund market and on the impact of economic stability on this behaviour. The results of the study may be useful for understanding the peculiarities of the Russian UIF market and for developing investment management strategies.