Neither rational nor profitable: IBI closes the fund based on Dan Ariely's model

IBI is closing the D.A. MODEL mutual fund, launched in 2018 in collaboration with Prof. Dan Ariely, after five years of zero returns and assets of only 2 million shekels. The liquidation will take effect on November 25. The fund was based on a human capital analysis model developed by Ariely and yielded significantly lower returns than the S&P 500 index.

IBI is closing the D.A. MODEL mutual fund, launched in 2018 in collaboration with Prof. Dan Ariely, after it yielded zero returns over five years and accumulated assets of only 2 million shekels. The liquidation will take effect on November 25. The fund was based on an investment model developed by Ariely, which analyzed companies' human capital. Since the beginning of the year, the fund has returned 7.2% compared to 12.35% for the S&P 500; over five years it lost 0.7% compared to a 70.2% surge in the index. Ariely, a well-known behavioral economics researcher, suffered reputational damage after his 2002 study was retracted due to suspicions of data manipulation. IBI stated that the fund's activity did not develop as expected.