Mutual Fund Investing Through EmployerSponsored Pension Plans Investor Knowledge and Policy Implications

Mutual Fund Investing Through EmployerSponsored Pension Plans Investor Knowledge and Policy... The flow of cash funds from employersponsored pension plans into mutual funds has been an important driving force behind the mutual fund industry's unprecedented recent growth. The increased attractiveness of mutual funds to pension investors is due to a shift from defined benefit to defined contribution plans, to changes in the tax laws, and to the growing recognition of certain types of mutual funds as suitable longterm investment vehicles. Accompanying the tremendous growth in defined contribution plans, however, has been a shift in investment risk from employers to employees. Using the responses from a nationwide telephone survey of 2,000 mutual fund shareholders, this paper analyzes various characteristics and investment knowledge of purchasers of mutual funds through employersponsored pension plans. The results show that overall, pension investors are as knowledgeable about the costs, risks, and returns associated with mutual funds as investors who purchase mutual funds through other distribution channels. However, when dividing the sample of pensionplan investors into two subsamples consisting of those who purchase mutual funds solely through the pension channel and those also employing other distribution channels, pensionchannelonly investors are found to be significantly less knowledgeable. These results suggest that there is much room for improvement in investor education for a large segment of pensionchannel investors. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Finance Emerald Publishing

Mutual Fund Investing Through EmployerSponsored Pension Plans Investor Knowledge and Policy Implications

Loading next page...
 
/lp/emerald-publishing/mutual-fund-investing-through-employersponsored-pension-plans-investor-L6c1zhQQYg
Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0307-4358
DOI
10.1108/eb018638
Publisher site
See Article on Publisher Site

Abstract

The flow of cash funds from employersponsored pension plans into mutual funds has been an important driving force behind the mutual fund industry's unprecedented recent growth. The increased attractiveness of mutual funds to pension investors is due to a shift from defined benefit to defined contribution plans, to changes in the tax laws, and to the growing recognition of certain types of mutual funds as suitable longterm investment vehicles. Accompanying the tremendous growth in defined contribution plans, however, has been a shift in investment risk from employers to employees. Using the responses from a nationwide telephone survey of 2,000 mutual fund shareholders, this paper analyzes various characteristics and investment knowledge of purchasers of mutual funds through employersponsored pension plans. The results show that overall, pension investors are as knowledgeable about the costs, risks, and returns associated with mutual funds as investors who purchase mutual funds through other distribution channels. However, when dividing the sample of pensionplan investors into two subsamples consisting of those who purchase mutual funds solely through the pension channel and those also employing other distribution channels, pensionchannelonly investors are found to be significantly less knowledgeable. These results suggest that there is much room for improvement in investor education for a large segment of pensionchannel investors.

Journal

Managerial FinanceEmerald Publishing

Published: Aug 1, 1997

There are no references for this article.

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off