Early 60s is not old enough: Evidence from twenty-one countries’ equity fund markets

Sei Wan Kim, Bong Soo Lee, Young Min Kim

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish
Pages (from-to)62-74
Number of pages13
JournalJournal of International Money and Finance
Volume92
DOIs
StatePublished - 1 Apr 2019

Keywords

  • Equity fund demand
  • Life expectancy
  • Old generation

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