Are Pictures Worth a Thousand Words? Infographics and Investment Decision Making

59 Pages Posted: 2 Nov 2018

See all articles by Ruben Cox

Ruben Cox

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Peter de Goeij

Tilburg University

Geert Van Campenhout

KU Leuven - FEB@HUBrussel

Date Written: November 2, 2018

Abstract

We use an incentivized survey experiment to test how visualizing key information of mutual funds helps investors to follow the minimum-cost investment strategy. Respondents can invest in three ETFs tracking the same index and we find that adding a net expected return graph reduces the amount of additional (preventable) fees incurred by up to 20 percent. Moreover, the effectiveness of visualizations depends on experience and familiarity with investing. More literate and higher educated respondents and those that find fees important incur lower fees irrespective of the inclusion of visualizations in disclosure. The importance of these background factors suggests that a one-size-fits-all approach is likely to be suboptimal.

Keywords: Infographics, mutual fund disclosure, individual investor decision making

JEL Classification: G11, M31, D12, D91, G18

Suggested Citation

Cox, Ruben and de Goeij, Peter and Van Campenhout, Geert, Are Pictures Worth a Thousand Words? Infographics and Investment Decision Making (November 2, 2018). Available at SSRN: https://ssrn.com/abstract=3277502 or http://dx.doi.org/10.2139/ssrn.3277502

Ruben Cox

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
+31 (0) 10 4088929 (Phone)

Peter De Goeij (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Room I607
Tilburg, Noord-Brabant 5000 LE
Netherlands
+31134662083 (Phone)

Geert Van Campenhout

KU Leuven - FEB@HUBrussel ( email )

Warmoesberg 26
Brussel, 1000
Belgium

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