Portfolio performance across genders and generations: The role of financial innovation

Retail Investing in Passive Exchange Traded Funds

“…Moreover, when overconfident investors buy mutual funds, they trade them frequently and prefer active funds with high expense ratios rather than passive index funds with low expense ratios such as ETFs. Consistent findings are reported in Davydov et al (2017). Consequently, we expect that P-ETFs are not targeted by overconfident investors, which leads to hypotheses H3 and H3*.…”

“…Compared to non-users, they find that ETF users are younger, wealthier (in terms of both portfolio value and overall wealth), and have a shorter relationship with the broker. Davydov et al (2017) bring evidence that investors perform better when they invest in mutual funds, although younger investors are more skillful in trading Exchange Traded Products (ETPs). 1 Although retail investors have a much easier access to well-diversified low-cost funds than in the past, very little is known about the determinants of retail investing in P-ETFs.…”

Investor attention and the use of leverage

“…The coefficient on Gender i,t is positive and highly statistically significant in every regression specification. As more leverage increases portfolio risk, this result is consistent with prior studies (e.g., Barber & Odean, 2001; Davydov et al., 2017), showing evidence that women take less risk than men. Furthermore, the results for AccountTenure i,t show that more experienced investors are more likely to use leveraged products and have a margin account.…”

“…The coefficient on Gender i,t is positive and highly statistically significant in every regression specification. As more leverage increases portfolio risk, this result is consistent with prior studies (e.g.,Barber & Odean, 2001;Davydov et al, 2017), showingTA B L E 3 Determinants of leverage usageThe table presents the estimates of the analysis of the determinants of leverage product use and trading margin account. The logistic model of the analysis is as follows: Leverage i,t = α i + Demographic i,t + Activity i,t + ε i,t , where Leverage i,t is one of the three dummy variables for the use of leverage: Margin i,t is a dummy variable for trading on margin account by investor i during a year, EmbedLev i,t is a dummy variable for the use of products with embedded leverage by investor i during a year, or AnyLev i,t , a dual variable indicating both trading on margin and/or use of products with embedded leverage by investor i during a year.…”

Gender diverse boards and goodwill changes: association between accounting conservatism, gender and governance

“…When it comes to risk-taking in finance, research suggest that women mitigate the risk-seeking and overconfident behavior of men, and thus likely help improve investment performance (Barber & Odean, 2001;Davydov et al, 2017;Huang & Kisgen, 2013). Palvia et al (2015) discovered that in the context of US commercial banking, female CEOs and chairwomen were more conservative and risk-averse than their male counterparts.…”