Brown, S. orcid.org/0000-0002-4853-9115, Kontonikas, A., Montagnoli, A. orcid.org/0000-0002-8260-4531 et al. (2 more authors) (Submitted: 2024) Household portfolios and financial literacy: the flight to delegation. [Preprint - SSRN] (Submitted)
Abstract
In this paper we analyse the asset allocation of European households, focusing on developments during the period that followed the recent twin financial crises. We examine whether ``search for yield'' materialises outside financial institutions and whether the degree of financial literacy plays a role. We consider a wider set of alternatives to safe assets by incorporating mutual funds to the standard set of stocks and bonds. We provide novel evidence which suggests that the “search for yield” during the post-crisis period of low interest rates took place not by raising the direct holdings of stocks and bonds, but rather indirectly through higher mutual funds’ holdings, in line with a “flight to delegation”. Importantly, this behaviour is strongly linked to the level of financial literacy, with the most literate households displaying significantly higher use of mutual funds.
Metadata
Item Type: | Preprint |
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Authors/Creators: |
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Keywords: | Asset allocation; Financial literacy; Delegation |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 11 Mar 2025 10:19 |
Last Modified: | 11 Mar 2025 10:19 |
Status: | Submitted |
Identification Number: | 10.2139/ssrn.4733672 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:223799 |