Purpose – The purpose of this paper is to provide a brief review of three strands of the literature on exchange‐traded funds. Design/methodology/approach – The paper starts with a review of the history of the growth of exchange‐traded funds and their characteristics. The paper then...

We examine the effects of daily return compounding, financing costs, and management factors on the performance of leveraged exchange-traded funds (LETFs) over various holding periods. We propose a new method to measure LETFs’ tracking errors that allows us to disentangle these effects. Our...

Purpose – The purpose of this paper is to provide a brief review of three strands of the literature on exchange-traded funds. Design/methodology/approach – The paper starts with a review of the history of the growth of exchange-traded funds and their characteristics. The paper then examines...

We find suggestive evidence that emotional balance has an impact on probability weighting incremental to demographic controls. Specifically, low negative affectivity (implying high emotional balance) tends to be a characteristic of those whose probability weighting functions exhibit lower...

There is evidence that risk-taking behavior is influenced by prior monetary gains and losses. When endowed with house money, people become more risk taking. This paper is the first to report a house money effect in a dynamic, financial setting. Using an experimental method, we compare market...