The effect of financial literacy on portfolio diversification of investment managers

Date of Publication

2010

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Accountancy

Subject Categories

Accounting

College

Ramon V. Del Rosario College of Business

Department/Unit

Accountancy

Thesis Adviser

Neil T. Penacerrada

Defense Panel Member

Rodiel C. Ferrer

Herminigilda E. Salendrez

Abstract/Summary

Most income-earners have undiversified portfolios. Financial institutions are meant to manage portfolios for these people, yet some people still prefer to keep their money out of circulation, owing to recent scandals creating mistrust in the market. Guiso and Jappelli (2008), based on a survey of bank clients, theorize that what drives the diversification problem is poor financial literacy in most people. Using their same instrument, we survey the population of portfolio management team members of an exclusive financial institution in the Philippines with the extracted indices of financial literacy and portfolio diversification expected to be much higher for them than for ordinary clients and statistically examine the variables to establish the existence of the literacy-diversification link. The results show a statistically significant effect of financial literacy on diversification and a high literacy mean for the institution, supporting the lack of diversification theory and encouraging people to invest in institutions and contribute to the economy.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU10309

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

x, 165 leaves : ill. 28 cm. + 1 computer optical disc

Keywords

Financial planners; Investment advisors

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