Introduction
Investment decisions with multiple funds
Normative framework
Proposed behavioral effects
Digital customization with interactive outcome-based risk–return distributions: From single to multiple investment funds
Customizing a single investment fund
Customizing multiple investment funds: The benefit of virtual integration
Experiment 1: Consumer investment decisions with identical correlated investment funds
Method
Results
Separate | Integrated | |
---|---|---|
Expected return | 8.4% (1.8%) | 7.9% (2.1%) |
Risk | 9.2% (3.0%) | 8.3% (3.6%) |
Loss in returns in separate condition | 0.04% (0.08%) | |
Excessive risk in separate condition | 0.07% (0.13%) |
Discussion
Experiment 2: The joint impact of different distributions and correlation
Method
Results
Separate | Integrated | |
---|---|---|
No correlation | ||
Expected returna | 7.6% (1.4%) | 7.2% (1.6%) |
Riska | 7.8% (2.3%) | 7.0% (2.7%) |
Loss in returns in separate conditionb | 0.06% (0.11%) | |
Excessive risk in separate conditionb | 0.10% (0.19%) | |
Positive correlation | ||
Expected returna | 7.4% (1.3%) | 8.2% (2.1%) |
Riska | 9.3% (2.7%) | 10.3% (4.2%) |
Loss in returns in separate conditionb | 0.20% (0.11%) | |
Excessive risk in separate conditionb | 0.39% (0.21%) |
Discussion
Experiment 3: The impact of more dissimilar investment goals and negatively correlated distributions
Method
Results
Separate | Semi-integrated | Integrated | |
---|---|---|---|
No correlation | |||
Expected returna, c | 8.3% (1.8%) | 8.0% (2.0%) | 8.0% (2.1%) |
Riska, b, c | 7.2% (2.4%) | 6.9% (2.7%) | 6.6% (2.8%) |
Loss in returnsc | 0.16% (0.29%) | 0.22% (0.34%) | |
Excessive riskc | 0.22% (0.38%) | 0.30% (0.46%) | |
Negative correlation | |||
Expected returna, b | 8.1% (1.8%) | 8.2% (2.0%) | 8.4% (2.3%) |
Riska, b | 4.9% (1.7%) | 5.0% (1.9%) | 4.5% (1.9%) |
Loss in returns | 0.62% (1.06%) | 0.72% (1.17%) | |
Excessive risk | 0.53% (0.89%) | 0.61% (0.99%) |