Improving Index Mutual Fund Risk Perception: Increase Financial Literacy or Communicate Better?
Peter de Goeij,
Geert Van Campenhout and
Economic Notes, 2018, vol. 47, issue 2-3, 519-552
We investigate the effect of financial literacy and index mutual fund risk disclosure format on investorsâ€™ risk perception by examining the risk disclosure part in the Key Investor Information Document (KIID) for UCITS funds in Europe. Using an experimental survey administered to 244 university students we find that both financial literacy and the KIID risk representation affect investorsâ€™ risk level perception accuracy. In addition, we find indications that financial literacy is less important if the complexity of the risk decision framework is reduced, although in our samle this effect is weak. Our results indicate that as an alternative to efforts taken to stimulate financial literacy, policy makers can effectively impact investorsâ€™ risk assessment by presenting a risk indicator that simplifies the decision framework for all investors, irrespective of their level of financial literacy.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:ecnote:v:47:y:2018:i:2-3:p:519-552
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0391-5026
Access Statistics for this article
More articles in Economic Notes from Banca Monte dei Paschi di Siena SpA
Bibliographic data for series maintained by Wiley Content Delivery ().