How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices?
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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1376182##www.nber.org/papers/w14859
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Beshears, John, James J. Choi, David I. Laibson, and Brigitte C. Madrian. 2009. How does simplified disclosure affect individuals' mutual fund choices? NBER Working Paper Series 14859.Abstract
We use an experiment to estimate the effect of the SEC’s Summary Prospectus, which simplifies mutual fund disclosure. Our subjects chose an equity portfolio and a bond portfolio. Subjects received either statutory prospectuses or Summary Prospectuses. We find no evidence that the Summary Prospectus affects portfolio choices. Our experiment sheds new light on the scope of investor confusion about sales loads. Even with a one-month investment horizon, subjects do not avoid loads. Subjects are either confused about loads, overlook them, or believe their chosen portfolio has an annualized log return that is 24 percentage points higher than the load-minimizing portfolio.Other Sources
www.som.yale.edu/faculty/jjc83/summaryprospectus.pdfTerms of Use
This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAPCitable link to this page
http://nrs.harvard.edu/urn-3:HUL.InstRepos:4686778
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