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Bargain Hunting or Star Gazing? Investors’ Preferences for Stock Mutual Funds

Ronald T. Wilcox
The Journal of Business
Vol. 76, No. 4 (October 2003), pp. 645-663
DOI: 10.1086/377034
Stable URL:
Page Count: 19
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Bargain Hunting or Star Gazing? Investors’ Preferences for Stock Mutual Funds
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Investors who wish to purchase shares in mutual funds balance many types of information, from a variety of sources, when making their fund selection. This research examines how investors choose a mutual fund within a given class of funds. Among the major findings are that investors pay a great deal of attention to past performance and vastly overweight loads relative to expense ratios when evaluating a fund’s overall fee structure. I also find that investors with a greater knowledge of basic finance are less likely, not more likely, to make reasonable fund choices.

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