Does holding passive ETFs change retail investor's trading behavior for the better?
(2021) 37th International Conference of the French Finance Association (AFFI) — Location: Online event (26.May.2021)
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- Authors
- Abstract
- We use random matching to study the trading behaviors of retail investors who hold passive exchange traded funds invested in stocks (P-ETFs). Using both trading records and survey data to control for all the key investor characteristics, we find strong evidence that retail investors trade differently when they hold P-ETFs. They have a higher portfolio size, a lower turnover, and keep their assets for a longer period of time than the control group of retail investors who hold individual stocks only. P-ETF retail investors are also better protected against stock gambling and those among them who follow a core-satellite approach are least likely to hold lottery-like stocks.
- Affiliations
Citations
D’Hondt, C., El Hichou El Maya, Y., & Petitjean, M. (2021). Does holding passive ETFs change retail investor’s trading behavior for the better? 37th International Conference of the French Finance Association (AFFI), Online event. https://hdl.handle.net/2078.5/108655