Motivated by the fact that demographic structure influences market risk aversion, we investigate how demographic structure affects demand for equity funds by employing twenty-one countries’ data. Our main findings are as follows. First, we find that the old generation is active in equity fund investment, which goes against the life cycle risk-aversion hypothesis. In particular, investors who have newly joined the old generation demonstrates a more marked demand for equity funds than do other aged investors. Second, we find that the old generation's greater demand for equity funds is associated with the size of this population and their increased life expectancy. Our empirical results reveal that persons who are in their early 60s, that is, who have newly joined the old generation, show less market risk aversion and increased demand for equity funds.
|Number of pages||13|
|Journal||Journal of International Money and Finance|
|State||Published - 1 Apr 2019|
- Equity fund demand
- Life expectancy
- Old generation