Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior
Identifieur interne : 000745 ( Main/Exploration ); précédent : 000744; suivant : 000746Why Consumers Choose Managed Mutual Funds Over Index Funds: Hypotheses from Consumer Behavior
Auteurs : Donald R. Lichtenstein ; Patrick J. Kaufmann [États-Unis] ; 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
Affiliations:
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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. We conclude with a call for increased government‐ and employer‐sponsored education programs aimed at creating a more informed consumer investor.</div></front></TEI><affiliations><list><country><li>États-Unis</li></country><region><li>Massachusetts</li></region></list><tree><noCountry><name sortKey="Bhagat, Sanjai" sort="Bhagat, Sanjai" uniqKey="Bhagat S" first="Sanjai" last="Bhagat">Sanjai Bhagat</name><name sortKey="Lichtenstein, Donald R" sort="Lichtenstein, Donald R" uniqKey="Lichtenstein D" first="Donald R." last="Lichtenstein">Donald R. Lichtenstein</name></noCountry><country name="États-Unis"><region name="Massachusetts"><name sortKey="Kaufmann, Patrick J" sort="Kaufmann, Patrick J" uniqKey="Kaufmann P" first="Patrick J." last="Kaufmann">Patrick J. Kaufmann</name></region></country></tree></affiliations></record>Pour manipuler ce document sous Unix (Dilib)
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