IQ and mutual fund choice

Tutkimustuotos: Lehtiartikkelivertaisarvioitu

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IQ and mutual fund choice. / Grinblatt, Mark; Ikäheimo, Seppo; Keloharju, Matti; Knüpfer, Samuli.

julkaisussa: Management Science, Vuosikerta 62, Nro 4, 01.04.2016, s. 924-944.

Tutkimustuotos: Lehtiartikkelivertaisarvioitu

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Grinblatt, Mark ; Ikäheimo, Seppo ; Keloharju, Matti ; Knüpfer, Samuli. / IQ and mutual fund choice. Julkaisussa: Management Science. 2016 ; Vuosikerta 62, Nro 4. Sivut 924-944.

Bibtex - Lataa

@article{b397f832e11847bf9d8b8593058ead4f,
title = "IQ and mutual fund choice",
abstract = "We show that cognitive ability influences mutual fund choice: high-IQ investors avoid funds with high management fees. Two competing stories can explain this phenomenon. One is that high-IQ consumers benefit less from costly services, as they find it easier to make informed financial decisions without external help. The alternative story is that these investors are less likely to overpay for the services they receive because they are either better judges of value or more capable of discerning the price charged for these services. A comprehensive data set of Finnish males' fund holdings supports both stories: consistent with the first story, high-IQ investors tend to avoid funds sold via expensive service-intensive channels and prefer a mix of equity and bond funds to expensive readily packaged balanced funds. Consistent with the alternative story, IQ and fees are inversely correlated, even after controlling for many fund services, including any operating at the fund family level.",
keywords = "Education, Fees, IQ, Mutual Fund, Portfolio Choice",
author = "Mark Grinblatt and Seppo Ik{\"a}heimo and Matti Keloharju and Samuli Kn{\"u}pfer",
year = "2016",
month = "4",
day = "1",
doi = "10.1287/mnsc.2015.2166",
language = "English",
volume = "62",
pages = "924--944",
journal = "Management Science",
issn = "0025-1909",
number = "4",

}

RIS - Lataa

TY - JOUR

T1 - IQ and mutual fund choice

AU - Grinblatt, Mark

AU - Ikäheimo, Seppo

AU - Keloharju, Matti

AU - Knüpfer, Samuli

PY - 2016/4/1

Y1 - 2016/4/1

N2 - We show that cognitive ability influences mutual fund choice: high-IQ investors avoid funds with high management fees. Two competing stories can explain this phenomenon. One is that high-IQ consumers benefit less from costly services, as they find it easier to make informed financial decisions without external help. The alternative story is that these investors are less likely to overpay for the services they receive because they are either better judges of value or more capable of discerning the price charged for these services. A comprehensive data set of Finnish males' fund holdings supports both stories: consistent with the first story, high-IQ investors tend to avoid funds sold via expensive service-intensive channels and prefer a mix of equity and bond funds to expensive readily packaged balanced funds. Consistent with the alternative story, IQ and fees are inversely correlated, even after controlling for many fund services, including any operating at the fund family level.

AB - We show that cognitive ability influences mutual fund choice: high-IQ investors avoid funds with high management fees. Two competing stories can explain this phenomenon. One is that high-IQ consumers benefit less from costly services, as they find it easier to make informed financial decisions without external help. The alternative story is that these investors are less likely to overpay for the services they receive because they are either better judges of value or more capable of discerning the price charged for these services. A comprehensive data set of Finnish males' fund holdings supports both stories: consistent with the first story, high-IQ investors tend to avoid funds sold via expensive service-intensive channels and prefer a mix of equity and bond funds to expensive readily packaged balanced funds. Consistent with the alternative story, IQ and fees are inversely correlated, even after controlling for many fund services, including any operating at the fund family level.

KW - Education

KW - Fees

KW - IQ

KW - Mutual Fund

KW - Portfolio Choice

UR - http://www.scopus.com/inward/record.url?scp=84964374936&partnerID=8YFLogxK

U2 - 10.1287/mnsc.2015.2166

DO - 10.1287/mnsc.2015.2166

M3 - Article

VL - 62

SP - 924

EP - 944

JO - Management Science

JF - Management Science

SN - 0025-1909

IS - 4

ER -

ID: 1979964