Mutual fund knowledge assessment for policy and decision problems

Authors

  • Brian Scholl Office of the Investor Advocate
  • Angela Fontes NORC at the University of Chicago

DOI:

https://doi.org/10.61190/fsr.v30i1.3470

Keywords:

Exchange-traded funds (ETFs), Knowledge, Human capital, Measurement, Investor decision-making, mutual funds, Financial literacy

Abstract

We develop a measure of mutual fund investment knowledge that complements existing fi- nancial literacy measures. Our question battery was administered to 3,444 survey respondents. We validate the index with factor analysis identifying two latent components, and descriptive regressions demonstrating the additive value of our index beyond general financial literacy in explaining variation in financial well-being, investment ownership, and fee calculation profi- ciency. Despite mutual funds’ importance in household savings, our index suggests that the public lacks adequate understanding of them. We demonstrate the utility of our index for studying selected decision and policy problems.

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Published

2022-03-30

How to Cite

Scholl, B., & Fontes, A. (2022). Mutual fund knowledge assessment for policy and decision problems. Financial Services Review, 30(1), 31–56. https://doi.org/10.61190/fsr.v30i1.3470

Issue

Vol. 30 No. 1 (2022): Spring 2022

Section

New Original Submission

License

Copyright (c) 2022 Academy of Financial Services

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