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Individual Investor Activity and Performance

Netspar Discussion Paper No. 10/2011-091 - revised version

46 Pages Posted: 25 Nov 2011 Last revised: 5 Jan 2016

See all articles by Magnus Dahlquist

Magnus Dahlquist

Stockholm School of Economics; Swedish House of Finance

Jose Vicente Martinez

University of Connecticut

Paul Söderlind

University of St. Gallen

Multiple version iconThere are 5 versions of this paper

Date Written: March 9, 2015

Abstract

We examine the daily activity and performance of a large panel of individual investors in Sweden's Premium Pension System in the period 2000 to 2010. We find that active investors outperform passive investors, and that there is a causal effect of fund changes on performance. Chosen funds outperform discarded funds over all the horizons we study. This outperformance is most significant for changes made within an asset class and towards funds with better recent past performance.

While activity is beneficial for some individual investors, extreme flows out of mutual funds affect funds' net asset value negatively for all investors.

Keywords: Coordinated fund changes, defined contribution, 401(k)

JEL Classification: G11, G23, H55

Suggested Citation

Dahlquist, Magnus and Martinez, Jose Vicente and Söderlind, Paul, Individual Investor Activity and Performance (March 9, 2015). Netspar Discussion Paper No. 10/2011-091 - revised version, Available at SSRN: https://ssrn.com/abstract=1964642 or http://dx.doi.org/10.2139/ssrn.1964642

Magnus Dahlquist (Contact Author)

Stockholm School of Economics ( email )

Drottninggatan 98
Stockholm, SE-111 60
Sweden

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Jose Vicente Martinez

University of Connecticut ( email )

2100 Hillside Road, Unit 1041
Storrs, CT 06269
United States

HOME PAGE: http://https://www.business.uconn.edu/person/jose-martinez/

Paul Söderlind

University of St. Gallen ( email )

Rosenbergstrasse 52
St. Gallen, 9000
Switzerland
+41 71 224 7064 (Phone)
+41 71 224 7088 (Fax)

HOME PAGE: http://https://sites.google.com/site/paulsoderlindecon/home

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