Kozup, John C., Elizabeth Howlett and Michael Pagano (2008), The Effects of Summary Information on Consumer Perceptions of Mutual Fund Characteristics, Journal Consumer Affairs, 42(1), 37-59.
Brief Description: Choosing how to best invest for retirement is one of the most important decisions a consumer can make. Unfortunately, this can be an especially challenging task given the current financial information disclosure environment. The objective of this research was to explore whether a single page supplemental information disclosure impacts investors’ fund evaluations and investment intentions. Results indicated that, while investors continue to place too much emphasis on prior performance, the provision of supplemental information, particularly in a graphical format, interacts with performance and investment knowledge to influence perceptions and evaluations of mutual funds.
Implications: The results showed that investors will respond positively to summary data presented on a single page. However, further testing of modified summary documents is needed to lessen existing biases on the part of investors, particularly an overemphasis on past performance versus expense information.