Closing the Investment Gap: How Targeted Financial Information Reduces Demographic Gaps in ETF Allocation

Jad Moawad ()
Additional contact information
Jad Moawad: Department of Social Policy and Intervention, University of Oxford

INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford

Abstract: The increasing complexity of financial markets and the shift towards individual responsibility for retirement savings highlight the importance of sound financial decision-making. However, significant gaps persist, with women and individuals from lower socioeconomic backgrounds often exhibiting lower financial literacy and market participation. While the effectiveness of broad financial education is debated, the impact of targeted, concise information on specific investment behaviors remains unclear. We conducted a pre-registered randomized controlled trial with a representative sample of U.S. adults (N=2,568) to investigate whether providing specific information about Exchange-Traded Funds (ETFs) - comparing their risks and returns to those of alternatives like gold, individual stock, savings, and cryptocurrency - could influence investment choices and reduce demographic gaps. Participants made allocation decisions for a real $100 lottery prize invested for one year. We find that the informational intervention significantly increased allocation to ETF (+17.8 percentage points) on average, shifting funds from savings, gold, and individual stock. Crucially, the intervention had larger effects among women, individuals without a bachelor's degree, and those from lower social origins, substantially eliminating the gender gap and narrowing gaps based on education and social origin. These results demonstrate that targeted, product-specific financial information can be a powerful tool to reduce investment inequalities and promote financial inclusion.

Keywords: Financial Literacy; Investment Behavior; Randomized Controlled Trial (RCT); Financial Inclusion; Portfolio allocation (search for similar items in EconPapers)
JEL-codes: C93 D14 G11 G53 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2025-08
New Economics Papers: this item is included in nep-age, nep-exp, nep-fle and nep-inv
References: Add references at CitEc
Citations:

Downloads: (external link)
https://oms-inet.files.svdcdn.com/production/files ... dq.pdf?dm=1755855496 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:amz:wpaper:2025-16

Access Statistics for this paper

More papers in INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by INET Oxford admin team ().