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How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices? / John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian.
- Format:
- Book
- Author/Creator:
- Beshears, John.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w14859.
- NBER working paper series no. w14859
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2009.
- Summary:
- 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.
- Notes:
- Print version record
- April 2009.
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