Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior
Identifieur interne : 000788 ( Istex/Corpus ); précédent : 000787; suivant : 000789Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior
Auteurs : Donald R. Lichtenstein ; Patrick J. Kaufmann ; Sanjai BhagatSource :
- Journal of Consumer Affairs [ 0022-0078 ] ; 1999-06.
English descriptors
- Teeft :
- Accurate knowledge, Additional trading, Advertising expense, Appropriate reference point, Average market return, Average market returns, Behavioral finance, Behavioral finance literatures, Broker, Business week, Causal factors, Confidence knowledge, Consumer affairs, Consumer behavior, Consumer education, Consumer traits, Consumer welfare, Current level, Decision rule, Extent investors, Finance literature, Financial education, Financial marketplace, Financial media, Fund choices, Fund cost, Fund costs, Fund investors, Fund investors exercise, Fund managers, Fund performance, Fund returns, Future performance, Future returns, Herd behavior, Independent search, Index fund, Index fund investors, Index funds, Index investment strategy, Index investors, Individual taste, Individual tastes, Information environment, Information search, Initial position, Investment advice, Investment advisors, Investment broker, Investment brokers, Investment choices, Investment decisions, Investment salespeople, Investment salesperson, Investor, Legal liability, Many consumers, Market inefficiency, Market returns, Marketplace information, Money managers, More confidence, Mutual fund, Mutual fund investors, Mutual fund market, Mutual fund returns, Mutual funds, Negative consumer welfare implications, Noise trading, Objective probability, Organizational behavior, Other hand, Other salespeople, Past performance, Plan sponsors, Positive relationship, Predictive knowledge, Preference bias, Price consciousness, Price movement, Price volatility, Problem recognition, Product quality, Reference point, Regulatory agencies, Russell sage foundation, Sales appeal, Salesperson, Same time, Sanjai bhagat, Skill situation, Strong evidence, Theoretical hypotheses, Total equity market, Value consciousness, World report.
Abstract
Much evidence exists which suggests that the vast majority of equity mutual fund managers do not possess differential information (or skills) which allow them to achieve above average market returns for their investors. Thus, when investors pay fees to equity mutual fund managers for investment advice and management, the very probable outcome is that they are reducing the return that they would otherwise achieve by investing in a nonmanaged index fund that tracks the total stock market (e.g., Wilshire 5000) or some significant portion of it (e.g., the Standard & Poor's 500). The long‐term negative consumer welfare implications are large, very possibly in the hundreds of thousands of dollars for individual consumer investors. Drawing largely on insights from the psychology, consumer behavior, and behavioral finance literatures, we offer a series of hypotheses that may partially account for such consumer choices. We conclude with a call for increased government‐ and employer‐sponsored education programs aimed at creating a more informed consumer investor.
Url:
DOI: 10.1111/j.1745-6606.1999.tb00766.x
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ISTEX:E1268BF34B42BD2503C14E386D78F70CDAFE70C7Le document en format XML
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Thus, when investors pay fees to equity mutual fund managers for investment advice and management, the very probable outcome is that they are reducing the return that they would otherwise achieve by investing in a nonmanaged index fund that tracks the total stock market (e.g., Wilshire 5000) or some significant portion of it (e.g., the Standard & Poor's 500). The long‐term negative consumer welfare implications are large, very possibly in the hundreds of thousands of dollars for individual consumer investors. Drawing largely on insights from the psychology, consumer behavior, and behavioral finance literatures, we offer a series of hypotheses that may partially account for such consumer choices. 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(1996)</json:string><json:string>Langer (1983)</json:string><json:string>Updegrave 1995</json:string><json:string>Alexander et al. (1996)</json:string></ref_bibl><bibl></bibl></unitex></namedEntities><ark><json:string>ark:/67375/WNG-X42468DB-8</json:string></ark><categories><wos><json:string>1 - social science</json:string><json:string>2 - economics</json:string><json:string>2 - business</json:string></wos><scienceMetrix><json:string>1 - economic & social sciences</json:string><json:string>2 - economics & business </json:string><json:string>3 - marketing</json:string></scienceMetrix><scopus><json:string>1 - Social Sciences</json:string><json:string>2 - Economics, Econometrics and Finance</json:string><json:string>3 - General Economics, Econometrics and Finance</json:string><json:string>1 - Social Sciences</json:string><json:string>2 - Social Sciences</json:string><json:string>3 - Sociology and Political Science</json:string></scopus><inist><json:string>1 - sciences humaines et sociales</json:string></inist></categories><publicationDate>1999</publicationDate><copyrightDate>1999</copyrightDate><doi><json:string>10.1111/j.1745-6606.1999.tb00766.x</json:string></doi><id>E1268BF34B42BD2503C14E386D78F70CDAFE70C7</id><score>1</score><fulltext><json:item><extension>pdf</extension><original>true</original><mimetype>application/pdf</mimetype><uri>https://api.istex.fr/document/E1268BF34B42BD2503C14E386D78F70CDAFE70C7/fulltext/pdf</uri></json:item><json:item><extension>zip</extension><original>false</original><mimetype>application/zip</mimetype><uri>https://api.istex.fr/document/E1268BF34B42BD2503C14E386D78F70CDAFE70C7/fulltext/zip</uri></json:item><istex:fulltextTEI uri="https://api.istex.fr/document/E1268BF34B42BD2503C14E386D78F70CDAFE70C7/fulltext/tei"><teiHeader><fileDesc><titleStmt><title level="a" type="main">Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior</title></titleStmt><publicationStmt><authority>ISTEX</authority><publisher>Blackwell Publishing Ltd</publisher><pubPlace>Oxford, UK</pubPlace><date type="published" when="1999-06"></date></publicationStmt><notesStmt><note type="content-type" subtype="article" source="article" scheme="https://content-type.data.istex.fr/ark:/67375/XTP-6N5SZHKN-D">article</note><note type="publication-type" subtype="journal" scheme="https://publication-type.data.istex.fr/ark:/67375/JMC-0GLKJH51-B">journal</note></notesStmt><sourceDesc><biblStruct type="article"><analytic><title level="a" type="main">Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior</title><author xml:id="author-0000"><persName><forename type="first">DONALD R.</forename><surname>LICHTENSTEIN</surname></persName><affiliation>Donald R. Lichtenstein is Professor of Marketing, University of Colorado, Boulder<address><country key="US"></country></address></affiliation></author><author xml:id="author-0001"><persName><forename type="first">PATRICK J.</forename><surname>KAUFMANN</surname></persName><affiliation>Patrick J. Kaufmann is Professor of Marketing, Boston University, Boston, MA</affiliation></author><author xml:id="author-0002"><persName><forename type="first">SANJAI</forename><surname>BHAGAT</surname></persName><affiliation>Sanjai Bhagat is Professor of Finance, University of Colorado, Boulder.<address><country key="US"></country></address></affiliation></author><idno type="istex">E1268BF34B42BD2503C14E386D78F70CDAFE70C7</idno><idno type="ark">ark:/67375/WNG-X42468DB-8</idno><idno type="DOI">10.1111/j.1745-6606.1999.tb00766.x</idno><idno type="unit">JOCA187</idno><idno type="toTypesetVersion">file:JOCA.JOCA187.pdf</idno></analytic><monogr><title level="j" type="main">Journal of Consumer Affairs</title><title level="j" type="alt">JOURNAL OF CONSUMER AFFAIRS</title><idno type="pISSN">0022-0078</idno><idno type="eISSN">1745-6606</idno><idno type="book-DOI">10.1111/(ISSN)1745-6606</idno><idno type="book-part-DOI">10.1111/joca.1999.33.issue-1</idno><idno type="product">JOCA</idno><idno type="publisherDivision">ST</idno><imprint><biblScope unit="vol">33</biblScope><biblScope unit="issue">1</biblScope><biblScope unit="page" from="187">187</biblScope><biblScope unit="page" to="187">187</biblScope><biblScope unit="page-count">1</biblScope><publisher>Blackwell Publishing Ltd</publisher><pubPlace>Oxford, UK</pubPlace><date type="published" when="1999-06"></date></imprint></monogr></biblStruct></sourceDesc></fileDesc><profileDesc><abstract xml:lang="en" style="main"><p>Much evidence exists which suggests that the vast majority of equity mutual fund managers do not possess differential information (or skills) which allow them to achieve above average market returns for their investors. Thus, when investors pay fees to equity mutual fund managers for investment advice and management, the very probable outcome is that they are reducing the return that they would otherwise achieve by investing in a nonmanaged index fund that tracks the total stock market (<hi rend="italic">e.g.</hi>, Wilshire 5000) or some significant portion of it (<hi rend="italic">e.g.</hi>, the Standard & Poor's 500). The long‐term negative consumer welfare implications are large, very possibly in the hundreds of thousands of dollars for individual consumer investors. Drawing largely on insights from the psychology, consumer behavior, and behavioral finance literatures, we offer a series of hypotheses that may partially account for such consumer choices. We conclude with a call for increased government‐ and employer‐sponsored education programs aimed at creating a more informed consumer investor.</p></abstract><textClass><keywords rend="tocHeading1"><term>PAPERS</term></keywords></textClass><langUsage><language ident="en"></language></langUsage></profileDesc></teiHeader></istex:fulltextTEI><json:item><extension>txt</extension><original>false</original><mimetype>text/plain</mimetype><uri>https://api.istex.fr/document/E1268BF34B42BD2503C14E386D78F70CDAFE70C7/fulltext/txt</uri></json:item></fulltext><metadata><istex:metadataXml wicri:clean="Wiley, elements deleted: body"><istex:xmlDeclaration>version="1.0" encoding="UTF-8" standalone="yes"</istex:xmlDeclaration><istex:document><component version="2.0" type="serialArticle" xml:lang="en"><header><publicationMeta level="product"><publisherInfo><publisherName>Blackwell Publishing Ltd</publisherName><publisherLoc>Oxford, UK</publisherLoc></publisherInfo><doi origin="wiley" registered="yes">10.1111/(ISSN)1745-6606</doi><issn type="print">0022-0078</issn><issn type="electronic">1745-6606</issn><idGroup><id type="product" value="JOCA"></id><id type="publisherDivision" value="ST"></id></idGroup><titleGroup><title type="main" sort="JOURNAL OF CONSUMER AFFAIRS">Journal of Consumer Affairs</title></titleGroup></publicationMeta><publicationMeta level="part" position="06101"><doi origin="wiley">10.1111/joca.1999.33.issue-1</doi><numberingGroup><numbering type="journalVolume" number="33">33</numbering><numbering type="journalIssue" number="1">1</numbering></numberingGroup><coverDate startDate="1999-06">Summer 1999</coverDate></publicationMeta><publicationMeta level="unit" type="article" position="0018700" status="forIssue"><doi origin="wiley">10.1111/j.1745-6606.1999.tb00766.x</doi><idGroup><id type="unit" value="JOCA187"></id></idGroup><countGroup><count type="pageTotal" number="1"></count></countGroup><titleGroup><title type="tocHeading1">PAPERS</title></titleGroup><eventGroup><event type="firstOnline" date="2005-03-03"></event><event type="publishedOnlineFinalForm" date="2005-03-03"></event><event type="xmlConverted" agent="Converter:BPG_TO_WML3G version:2.3.25.1 mode:FullText" date="2010-11-02"></event><event type="xmlConverted" agent="Converter:WILEY_ML3G_TO_WILEY_ML3GV2 version:3.8.8" date="2014-01-31"></event><event type="xmlConverted" agent="Converter:WML3G_To_WML3G version:4.1.7 mode:FullText,remove_FC" date="2014-10-30"></event></eventGroup><numberingGroup><numbering type="pageFirst" number="187">187</numbering><numbering type="pageLast" number="187">187</numbering></numberingGroup><linkGroup><link type="toTypesetVersion" href="file:JOCA.JOCA187.pdf"></link></linkGroup></publicationMeta><contentMeta><countGroup><count type="referenceTotal" number="21"></count><count type="linksCrossRef" number="3"></count></countGroup><titleGroup><title type="main">Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior</title></titleGroup><creators><creator creatorRole="author" xml:id="cr1" affiliationRef="#a1"><personName><givenNames>DONALD R.</givenNames><familyName>LICHTENSTEIN</familyName></personName></creator><creator creatorRole="author" xml:id="cr2" affiliationRef="#a2"><personName><givenNames>PATRICK J.</givenNames><familyName>KAUFMANN</familyName></personName></creator><creator creatorRole="author" xml:id="cr3" affiliationRef="#a3"><personName><givenNames>SANJAI</givenNames><familyName>BHAGAT</familyName></personName></creator></creators><affiliationGroup><affiliation xml:id="a1" countryCode="US"><unparsedAffiliation>Donald R. Lichtenstein is Professor of Marketing, University of Colorado, Boulder</unparsedAffiliation></affiliation><affiliation xml:id="a2"><unparsedAffiliation>Patrick J. Kaufmann is Professor of Marketing, Boston University, Boston, MA</unparsedAffiliation></affiliation><affiliation xml:id="a3" countryCode="US"><unparsedAffiliation>Sanjai Bhagat is Professor of Finance, University of Colorado, Boulder.</unparsedAffiliation></affiliation></affiliationGroup><abstractGroup><abstract type="main" xml:lang="en"><p>Much evidence exists which suggests that the vast majority of equity mutual fund managers do not possess differential information (or skills) which allow them to achieve above average market returns for their investors. Thus, when investors pay fees to equity mutual fund managers for investment advice and management, the very probable outcome is that they are reducing the return that they would otherwise achieve by investing in a nonmanaged index fund that tracks the total stock market (<i>e.g.</i>, Wilshire 5000) or some significant portion of it (<i>e.g.</i>, the Standard & Poor's 500). The long‐term negative consumer welfare implications are large, very possibly in the hundreds of thousands of dollars for individual consumer investors. Drawing largely on insights from the psychology, consumer behavior, and behavioral finance literatures, we offer a series of hypotheses that may partially account for such consumer choices. We conclude with a call for increased government‐ and employer‐sponsored education programs aimed at creating a more informed consumer investor.</p></abstract></abstractGroup></contentMeta><noteGroup><note xml:id="n-fnt-1"><p>This research was funded by a University of Colorado College of Business Research Grant to the first author. We gratefully acknowledge the comments of william O. Bearden, Bridgette M. Braig, Dipankar Chakravarti, Barry L. Lewis, Richard J. Lutz, Thomas P. Meehan, Burton G. Malkiel, Terence A. Shimp, the Editor, and the three anonymous revieweras.</p></note></noteGroup></header></component></istex:document></istex:metadataXml><mods version="3.6"><titleInfo lang="en"><title>Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior</title></titleInfo><titleInfo type="alternative" contentType="CDATA" lang="en"><title>Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior</title></titleInfo><name type="personal"><namePart type="given">DONALD R.</namePart><namePart type="family">LICHTENSTEIN</namePart><affiliation>Donald R. Lichtenstein is Professor of Marketing, University of Colorado, Boulder</affiliation><role><roleTerm type="text">author</roleTerm></role></name><name type="personal"><namePart type="given">PATRICK J.</namePart><namePart type="family">KAUFMANN</namePart><affiliation>Patrick J. Kaufmann is Professor of Marketing, Boston University, Boston, MA</affiliation><role><roleTerm type="text">author</roleTerm></role></name><name type="personal"><namePart type="given">SANJAI</namePart><namePart type="family">BHAGAT</namePart><affiliation>Sanjai Bhagat is Professor of Finance, University of Colorado, Boulder.</affiliation><role><roleTerm type="text">author</roleTerm></role></name><typeOfResource>text</typeOfResource><genre type="article" displayLabel="article" authority="ISTEX" authorityURI="https://content-type.data.istex.fr" valueURI="https://content-type.data.istex.fr/ark:/67375/XTP-6N5SZHKN-D">article</genre><originInfo><publisher>Blackwell Publishing Ltd</publisher><place><placeTerm type="text">Oxford, UK</placeTerm></place><dateIssued encoding="w3cdtf">1999-06</dateIssued><copyrightDate encoding="w3cdtf">1999</copyrightDate></originInfo><language><languageTerm type="code" authority="rfc3066">en</languageTerm><languageTerm type="code" authority="iso639-2b">eng</languageTerm></language><physicalDescription><extent unit="references">21</extent><extent unit="linksCrossRef">3</extent></physicalDescription><abstract lang="en">Much evidence exists which suggests that the vast majority of equity mutual fund managers do not possess differential information (or skills) which allow them to achieve above average market returns for their investors. Thus, when investors pay fees to equity mutual fund managers for investment advice and management, the very probable outcome is that they are reducing the return that they would otherwise achieve by investing in a nonmanaged index fund that tracks the total stock market (e.g., Wilshire 5000) or some significant portion of it (e.g., the Standard & Poor's 500). The long‐term negative consumer welfare implications are large, very possibly in the hundreds of thousands of dollars for individual consumer investors. Drawing largely on insights from the psychology, consumer behavior, and behavioral finance literatures, we offer a series of hypotheses that may partially account for such consumer choices. We conclude with a call for increased government‐ and employer‐sponsored education programs aimed at creating a more informed consumer investor.</abstract><relatedItem type="host"><titleInfo><title>Journal of Consumer Affairs</title></titleInfo><genre type="journal" authority="ISTEX" authorityURI="https://publication-type.data.istex.fr" valueURI="https://publication-type.data.istex.fr/ark:/67375/JMC-0GLKJH51-B">journal</genre><identifier type="ISSN">0022-0078</identifier><identifier type="eISSN">1745-6606</identifier><identifier type="DOI">10.1111/(ISSN)1745-6606</identifier><identifier type="PublisherID">JOCA</identifier><part><date>1999</date><detail type="volume"><caption>vol.</caption><number>33</number></detail><detail type="issue"><caption>no.</caption><number>1</number></detail><extent unit="pages"><start>187</start><end>187</end><total>1</total></extent></part></relatedItem><identifier type="istex">E1268BF34B42BD2503C14E386D78F70CDAFE70C7</identifier><identifier type="ark">ark:/67375/WNG-X42468DB-8</identifier><identifier type="DOI">10.1111/j.1745-6606.1999.tb00766.x</identifier><identifier type="ArticleID">JOCA187</identifier><recordInfo><recordContentSource authority="ISTEX" authorityURI="https://loaded-corpus.data.istex.fr" valueURI="https://loaded-corpus.data.istex.fr/ark:/67375/XBH-L0C46X92-X">wiley</recordContentSource><recordOrigin>Blackwell Publishing Ltd</recordOrigin></recordInfo></mods><json:item><extension>json</extension><original>false</original><mimetype>application/json</mimetype><uri>https://api.istex.fr/document/E1268BF34B42BD2503C14E386D78F70CDAFE70C7/metadata/json</uri></json:item></metadata><serie></serie></istex></record>Pour manipuler ce document sous Unix (Dilib)
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