Characteristics of ETF Owners: Exploring the Role of Investor Knowledge, Fee Aversion, and Financial Advice Seeking

30 Pages Posted: 1 Oct 2018

See all articles by Shane Enete

Shane Enete

Biola University; Kansas State University, School of Family Studies and Human Services, School of Family Studies and Human Services

Miranda Reiter

Kansas State University - Institute of Personal Financial Planning, Students

Wendy Usrey

Kansas State University - School of Family Studies and Human Services, Students

Andrew Scott

Kansas State University - School of Family Studies and Human Services, Students

Martin Seay

Kansas State University

Date Written: September 30, 2018

Abstract

Using the 2015 NFCS Investor Survey, this study investigated the relationship between individual financial characteristics and ETF ownership. While ETFs offer many benefits in comparison to traditional mutual funds, only 22% of investors held ETFs in their investment portfolios. Those ETF owners had higher financial knowledge than their non-ETF owning counterparts, supporting bounded rationality as a driver of investment behavior. The source of the financial knowledge, whether subjective or objective, made no significant difference. Seeking financial help through a financial advisor and aversion to fees were not significant variables in explaining the variation in ETF ownership while increased risk tolerance and financial satisfaction were associated with ETF ownership.

Keywords: ETF, investing, knowledge, investor, advice, fee

Suggested Citation

Enete, Shane and Reiter, Miranda and Usrey, Wendy and Scott, Andrew and Seay, Martin, Characteristics of ETF Owners: Exploring the Role of Investor Knowledge, Fee Aversion, and Financial Advice Seeking (September 30, 2018). 2019 Academic Research Colloquium for Financial Planning and Related Disciplines. Available at SSRN: https://ssrn.com/abstract=3257811 or http://dx.doi.org/10.2139/ssrn.3257811

Shane Enete (Contact Author)

Biola University ( email )

United States

Kansas State University, School of Family Studies and Human Services, School of Family Studies and Human Services ( email )

KS
United States

Miranda Reiter

Kansas State University - Institute of Personal Financial Planning, Students ( email )

307 Justin Hall
Manhattan, KS 66506-1403
United States

Wendy Usrey

Kansas State University - School of Family Studies and Human Services, Students ( email )

KS
United States

Andrew Scott

Kansas State University - School of Family Studies and Human Services, Students ( email )

KS
United States

Martin Seay

Kansas State University ( email )

Manhattan, KS 66506-4001
United States

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