Decision-making in mutual funds - A study of non-experts' decision-making process when choosing between mutual funds and the impact of presentation format

Abstract: The Swedish population has never been this invested in funds, as a means of saving for retirement as well as personal savings. Yet, there is a growing concern regarding people's (non-experts) capabilities in the investment scene. Previous research within economic psychology is divided regarding the concept of human rationality, and policy makers are spending vast amounts of money and resources on how to structure tasks to "nudge" or help people make better decisions. Yet, there is still little known regarding how we make decisions. The purpose of this thesis was thus to explore the decision-making process in non-experts when choosing between a set of funds and furthermore study if presentation format has any influence. Verbal protocols were the chosen methodology and 13 non-expert participants took part in the study. The analysis was both quantitative and qualitative. The primary findings are two-folded, data supports the idea of bounded rationality in the decision-making process in line with what is expected from non-expert. Furthermore, that presentation format seemed to have an effect on the decision. An unanticipated finding was that the general primary challenge for the participants was in understanding the technical language.