Mutual fund advertisers often highlight their funds’ past returns albeit with an SEC mandated disclosure. To ascertain whether the SEC disclosure is effective and how it could be improved, the authors conduct seven experiments of individuals’ choices of mutual funds with ads touting past success plus disclosures. These experiments lead to several findings: First, current SEC disclosures do not work because investors fall prey to the hot hand bias and believe that past performance trends will continue. Second, while investors comprehend the content of the SEC disclosure, they misapply it. Third, an alternate stronger, less ambiguous disclosure effectively attenuates investors’ preferences for funds with longer (vs. shorter) performance runs. Fourth, the authors also show that only a disclosure that directly relates to the beliefs that give rise to the hot hand bias overcomes peoples’ tendency to chase returns. Fifth, these findings generalize to the real estate context. This is the only research that shows that when the SEC disclosure found in mutual fund ads is pitted against the hot hand bias, the hot hand wins out. Yet, a strongly worded disclosure has some success at debiasing individuals. Implications for policy makers, practitioners, and consumers are discussed.

共同基金广告客户通常会通过SEC强制性披露来强调其基金过去的回报。为了确定SEC的披露是否有效以及如何加以改进，作者进行了七个个人对共同基金选择的实验，并宣传过去的成功与披露。这些实验得出以下几个发现：首先，当前的SEC披露行不通，因为投资者容易受制于偏见，并相信过去的业绩趋势将继续。其次，在投资者理解SEC披露的内容的同时，他们错误地使用了它。第三，更强大，更不模糊的替代披露有效地削弱了投资者对表现周期较长（而较短）的基金的偏好。第四，这组作者还表明，只有与引起热手偏见的信念直接相关的披露才能克服人们追逐回报的趋势。第五，这些发现普遍适用于房地产领域。这是唯一一项显示出，如果在共同基金广告中发现的SEC披露与热手偏见发生冲突，热手就将胜出。然而，措辞强烈的披露在消除个人偏见方面取得了一些成功。讨论了对决策者，从业人员和消费者的影响。措辞强烈的披露在消除个人偏见方面取得了一些成功。讨论了对决策者，从业人员和消费者的影响。措辞强烈的披露在消除个人偏见方面取得了一些成功。讨论了对决策者，从业人员和消费者的影响。