IQ and Mutual Fund Choice

57 Pages Posted: 15 Mar 2012 Last revised: 16 May 2013

See all articles by Mark Grinblatt

Mark Grinblatt

University of California, Los Angeles (UCLA) - Finance Area; Yale University - International Center for Finance; National Bureau of Economic Research (NBER)

Seppo Ikaheimo

Aalto University

Matti Keloharju

Aalto University - School of Business; Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR)

Samuli Knüpfer

BI Norwegian Business School; Research Institute of Industrial Economics (IFN)

Date Written: May 14, 2013

Abstract

Using a comprehensive dataset of Finnish males, we study IQ’s influence on mutual fund choice. High-IQ investors are less likely to own categories of funds that tend to charge higher fees — including balanced funds, actively managed funds, and funds marketed through a retail network. Moreover, within categories of funds stratified by asset class, investment philosophy, and distribution method, high-IQ investors prefer the lowest-fee funds, further reducing the fees incurred. IQ’s effect on fee sensitivity controls for other investor attributes, including education and profession, and is robust to the addition of fund family dummies, alternative specifications, and analyses restricted to interesting subsamples.

Keywords: mutual fund, IQ, fees, portfolio choice

JEL Classification: G11, G24, D12, D83

Suggested Citation

Grinblatt, Mark and Ikaheimo, Seppo and Keloharju, Matti and Knüpfer, Samuli, IQ and Mutual Fund Choice (May 14, 2013). AFA 2013 San Diego Meetings Paper, San Diego Jan. 4-6, 2013. Available at SSRN: https://ssrn.com/abstract=2021957 or http://dx.doi.org/10.2139/ssrn.2021957

Mark Grinblatt

University of California, Los Angeles (UCLA) - Finance Area ( email )

Los Angeles, CA 90095-1481
United States
310-825-1098 (Phone)
310-206-5455 (Fax)

Yale University - International Center for Finance

Box 208200
New Haven, CT 06520-8200
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Seppo Ikaheimo

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland

Matti Keloharju (Contact Author)

Aalto University - School of Business ( email )

P.O. Box 21210
AALTO, FI-00076
Finland
+358 40 353 8043 (Phone)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Samuli Knüpfer

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

HOME PAGE: http://www.samuliknupfer.com

Research Institute of Industrial Economics (IFN)

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

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