Abstract

http://ssrn.com/abstract=2417976
 


 



Who is Internationally Diversified? Evidence from 296 401(k) Plans


Geert Bekaert


Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Kenton Hoyem


Financial Engines, Inc.

Wei-Yin Hu


Financial Engines, Inc.

Enrichetta Ravina


Columbia Business School - Finance and Economics

April 21, 2015


Abstract:     
We examine the international equity allocations of 3.8 million individuals in 296 401(k) plans over the 2005-2011 period. We find enormous cross-individual variation, ranging from zero to over 75%, and strong cohort effects, with younger cohorts investing more internationally than older ones, and each cohort investing more internationally over time. Access to financial advice, lower fees and more international fund options are associated with higher international allocations, suggesting a role for plan design and policy. Education, financial literacy and the fraction of foreign-born population in the zip code also have positive effects on international diversification, consistent with familiarity and information stories.

Number of Pages in PDF File: 78

Keywords: International Diversification, Microdata, 401(k) Portfolios

JEL Classification: G11, G15, G23


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Date posted: March 31, 2014 ; Last revised: April 22, 2015

Suggested Citation

Bekaert, Geert and Hoyem, Kenton and Hu, Wei-Yin and Ravina, Enrichetta, Who is Internationally Diversified? Evidence from 296 401(k) Plans (April 21, 2015). Available at SSRN: http://ssrn.com/abstract=2417976 or http://dx.doi.org/10.2139/ssrn.2417976

Contact Information

Geert Bekaert
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Kenton Hoyem
Financial Engines, Inc. ( email )
1804 Embarcadero Road
Palo Alto, CA 94303
United States
Wei-Yin Hu
Financial Engines, Inc. ( email )
1804 Embarcadero Road
Palo Alto, CA 94303
United States
Enrichetta Ravina (Contact Author)
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States
HOME PAGE: http://www0.gsb.columbia.edu/faculty/eravina/research.html

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