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Why is investors'mutual fund market allocation far from the optimum?

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Listed:
  • Ricardo Laborda
  • Ramiro Losada

Abstract

In this paper, It is analysed the differences between the optimal portfolio of funds that a fully informed investor might select and the current structure of the mutual fund markets as characterized by the funds’ risk profile (conservative or aggressive) and target investor type (retail or wholesale). It is found that the relationship between fund age, market share and change in total net assets –but not fees- and the optimal portfolio of funds depends on the structure of the mutual fund market.

Suggested Citation

  • Ricardo Laborda & Ramiro Losada, 2017. "Why is investors'mutual fund market allocation far from the optimum?," CNMV Working Papers CNMV Working Papers no. 6, CNMV- Spanish Securities Markets Commission - Research and Statistics Department.
    • Handle: RePEc:cnv:wpaper:dt_65en
    as

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    File URL: http://www.cnmv.es/DocPortal/Publicaciones/MONOGRAFIAS/Monografia_65_en.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Optimal portfolio of funds; fund characteristics; risk profile; retail; frictions.;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G19 - Financial Economics - - General Financial Markets - - - Other

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