Based on the data from the 2020 China Investor Education Status Survey and investor transaction, we systematically discuss the impacts of financial education on investment returns and the channels. It is found that: first, financial education significantly improves investors’ investment returns of stocks and financial assets. Second, from the perspective of asset allocation, financial education improves investment returns mainly by reducing investors’ stock holding homogenization and increasing portfolio diversification. And from the perspective of investment strategy, financial education improves investment returns by reducing investors’ tendency to trend-chasing and selecting passive management-oriented strategies. Third, investors with the sense of long-term financial education have a higher likelihood of achieving positive returns. Our findings provide new empirical evidence for the effectiveness of financial education and may contribute to the integration of financial education into the national education system.
