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| Author: | Norden, L. |
| Title: | Individual home bias, portfolio churning and performance |
| Journal: | European Journal of Finance
2010 : APR-JUN, VOL. 16:3-4, p. 329-351 |
| Index terms: | bias investors personal finance pension funds Sweden |
| Freeterms: | home individual portfolio churning performance |
| Language: | eng |
| Abstract: | The paper investigates economic consequences of individual investors' home bias and portfolio churning in their personal pension accounts and analysis a Heckman style two-stage framework. The author's Results indicate that home bias induces a worse risk-adjusted performance. Home-biased individuals' relatively bad performance originates in insufficient risk-reduction, due to a lack of international diversification. A higher degree of portfolio churning also deteriorates performance, despite the fact that churning is not associated with any direct transaction costs. |
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