TY  - JOUR
AU  - Beshears,John
AU  - Choi,James J.
AU  - Laibson,David
AU  - Madrian,Brigitte C.
TI  - How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14859
PY  - 2009
Y2  - April 2009
UR  - http://www.nber.org/papers/w14859
L1  - http://www.nber.org/papers/w14859.pdf
N1  - Author contact info:
John Beshears
Stanford Graduate School of Business
655 Knight Way
Stanford, CA 94305-7298
Tel: 650/723-6792
E-Mail: beshears@stanford.edu

James J. Choi
Yale School of Management
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
E-Mail: james.choi@yale.edu

David Laibson
Department of Economics
Littauer M-12
Harvard University
Cambridge, MA 02138
Tel: 617/496-3402
Fax: 617/495-8570
E-Mail: dlaibson@gmail.com

Brigitte C. Madrian
John F. Kennedy School of Government
Harvard University
79 JFK Street
Cambridge, MA 02138
Tel: 617-495-8917
Fax: 617-496-5960
E-Mail: Brigitte_Madrian@Harvard.edu
AB  - 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.
ER  -