New research indicates that loss averse mutual fund managers garner lower returns and are more likely to be fired. The study queried Swedish fund managers regarding their personal willingness to participate in risky lotteries and then followed the manager’s performance over the next eight years. The researchers categorized the managers by their responses into high loss aversion (37%), middle loss aversion (38%), and low loss aversion (25%). Funds managed by those in the high loss aversion categories returned between 9.6 to 17.4 basis points lower monthly risk-adjusted returns when compared to funds managed by their peers in the low risk aversion category. Additionally, these funds faced higher downside risk as well. The study also showed that high loss aversion managers are correspondingly more likely to have their contracts terminated than low loss aversion managers (36% versus 5.88% over the eight year period).