Effectiveness of an interactive method in teaching investment literacy: Factors determining the return of beginning investors’ portfolios

Abstract

Introduction. The article examines how certain factors influence the efficiency of forming virtual portfolio of financial assets. The purpose of the article is to identify the factors that contribute to the investment return of beginning investors. Materials and Methods. The methodological basis of the study includes Russian and international research articles devoted to enhancing financial and investment literacy on the national level, the role of financial education in successful investments, and the factors of return estimations for various groups of investors, including young people and beginners. The research was carried out at Novosibirsk State University (the Faculty of Economics). Portfolios produced by 396 students majoring in Economics, Management, and IT Business, who completed the ‘Financial Markets and Financial Institutions’ module were analyzed. The portfolios were completed in 2020, 2021, and 2022. The dependent variable in the econometric model was an investment portfolio return. The main factors considered for this research included students' academic performance, academic year, degree programme, age, gender, and financial asset structure of each portfolio. Results. The review of the scholarly literature allowed to identify the following potential return factors: investment literacy, educational background, personal behaviour characteristics, gender, financial market shocks, and economic crises. It was found that portfolio return is determined by the following factors: economic instability influencing financial markets, students’ academic performance in finance disciplines which is closely connected to their investment literacy and personality features revealed in the portfolio structure. However, age, degree programme and gender did not show any significant influence on the project outcome. Conclusions. Identifying the factors of students’ investment portfolio return enabled the authors to determine further development of the financial course with the interactive method in teaching investing literacy. Taking into consideration economic instability factor significance, it is necessary to discuss financial assets characteristics and dynamics during economic crises. In general, investment literacy increase influences the result positively.