IDEAS home Printed from https://ideas.repec.org/a/spr/jecfin/v39y2015i3p454-477.html
   My bibliography  Save this article

Mutual fund fees and performance: new insights

Author

Listed:
  • Sharon Garyn-Tal

Abstract

Previous research suggests that expense ratios as well as rear loads influence mutual funds performance. The analysis of over 1,395 U.S non-specialized mutual funds in 2001–2010 confirms that there are statistically significant relations between funds expense ratios and alpha and between rear loads and alpha. But when taking into consideration funds classification, I find that within each classification group there are no such consistent relations (and mostly no relations at all) between the expenses and loads the funds charge and the alphas they earn. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Sharon Garyn-Tal, 2015. "Mutual fund fees and performance: new insights," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(3), pages 454-477, July.
    • Handle: RePEc:spr:jecfin:v:39:y:2015:i:3:p:454-477
    DOI: 10.1007/s12197-013-9257-z
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s12197-013-9257-z
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s12197-013-9257-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. D. K. Malhotra & Robert W. McLeod, 1997. "An Empirical Analysis Of Mutual Fund Expenses," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 20(2), pages 175-190, June.
    2. Grinblatt, Mark & Titman, Sheridan, 1994. "A Study of Monthly Mutual Fund Returns and Performance Evaluation Techniques," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 29(3), pages 419-444, September.
    3. Timo P. Korkeamaki & Thomas I. Smythe, 2004. "Effects of Market Segmentation and Bank Concentration on Mutual Fund Expenses and Returns: Evidence from Finland," European Financial Management, European Financial Management Association, vol. 10(3), pages 413-438, September.
    4. Lu Zheng, 1999. "Is Money Smart? A Study of Mutual Fund Investors' Fund Selection Ability," Journal of Finance, American Finance Association, vol. 54(3), pages 901-933, June.
    5. Dellva, Wilfred L & Olson, Gerard T, 1998. "The Relationship between Mutual Fund Fees and Expenses and Their Effects on Performance," The Financial Review, Eastern Finance Association, vol. 33(1), pages 85-103, February.
    6. Gruber, Martin J, 1996. "Another Puzzle: The Growth in Activity Managed Mutual Funds," Journal of Finance, American Finance Association, vol. 51(3), pages 783-810, July.
    7. Erik R. Sirri & Peter Tufano, 1998. "Costly Search and Mutual Fund Flows," Journal of Finance, American Finance Association, vol. 53(5), pages 1589-1622, October.
    8. Ajay Khorana & Henri Servaes & Peter Tufano, 2009. "Mutual Fund Fees Around the World," Review of Financial Studies, Society for Financial Studies, vol. 22(3), pages 1279-1310.
    9. Prather, Laurie & Bertin, William J. & Henker, Thomas, 2004. "Mutual fund characteristics, managerial attributes, and fund performance," Review of Financial Economics, Elsevier, vol. 13(4), pages 305-326.
    10. Malhotra, D K & McLeod, Robert W, 1997. "An Empirical Analysis of Mutual Fund Expenses," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 20(2), pages 175-190, Summer.
    11. Fama, Eugene F & French, Kenneth R, 1996. "Multifactor Explanations of Asset Pricing Anomalies," Journal of Finance, American Finance Association, vol. 51(1), pages 55-84, March.
    12. Brad M. Barber & Terrance Odean & Lu Zheng, 2005. "Out of Sight, Out of Mind: The Effects of Expenses on Mutual Fund Flows," The Journal of Business, University of Chicago Press, vol. 78(6), pages 2095-2120, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. J. Alsubaiei, Bader & Calice, Giovanni & Vivian, Andrew, 2021. "Sovereign CDS and mutual funds: Global evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 73(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Babalos, Vassilios & Kostakis, Alexandros & Philippas, Nikolaos, 2009. "Managing mutual funds or managing expense ratios? Evidence from the Greek fund industry," Journal of Multinational Financial Management, Elsevier, vol. 19(4), pages 256-272, October.
    2. Marco Navone & Giacomo Nocera, 2016. "Unbundling the Expense Ratio: Hidden Distribution Costs in European Mutual Fund Markets," European Financial Management, European Financial Management Association, vol. 22(4), pages 640-666, September.
    3. Paulo ALVES, 2015. "The Fees Of Mutual Funds And Real Estate Funds Their Determinants In A Small Market," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 6(1), pages 20-28.
    4. Isabel Toledo & Rocío Marco, 2010. "Costs associated with mutual funds in Spain," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 15(2), pages 165-179.
    5. Tran-Dieu, Linh, 2015. "How do mutual funds transfer scale economies to investors? Evidence from France," Research in International Business and Finance, Elsevier, vol. 34(C), pages 66-83.
    6. Soo-Wah Low, 2008. "A cross-sectional analysis of Malaysian unit trust fund expense ratios," Journal of Asset Management, Palgrave Macmillan, vol. 9(4), pages 270-277, October.
    7. Prather, Laurie & Bertin, William J. & Henker, Thomas, 2004. "Mutual fund characteristics, managerial attributes, and fund performance," Review of Financial Economics, Elsevier, vol. 13(4), pages 305-326.
    8. Laurie Prather & William J. Bertin & Thomas Henker, 2004. "Mutual fund characteristics, managerial attributes, and fund performance," Review of Financial Economics, John Wiley & Sons, vol. 13(4), pages 305-326.
    9. Rakowski, David & Yamani, Ehab, 2021. "Endogeneity in the mutual fund flow–performance relationship: An instrumental variables solution," Journal of Empirical Finance, Elsevier, vol. 64(C), pages 247-271.
    10. Vassilios Babalos & Michael Doumpos & Nikolaos Philippas & Constantin Zopounidis, 2015. "Towards a Holistic Approach for Mutual Fund Performance Appraisal," Computational Economics, Springer;Society for Computational Economics, vol. 46(1), pages 35-53, June.
    11. Ayadi, Mohamed A. & Kryzanowski, Lawrence & Mohebshahedin, Mahmood, 2018. "Impact of sponsorship on fixed-income fund performance," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 121-137.
    12. Shinozawa, Yoshikatsu & Vivian, Andrew, 2015. "Determinants of money flows into investment trusts in Japan," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 37(C), pages 138-161.
    13. Teresa Corzo Santamaría & Carlos Martinez de Ibarreta & Juan Rodriguez Calvo, 2018. "Timid performance fees in mutual funds," Journal of Asset Management, Palgrave Macmillan, vol. 19(1), pages 64-77, January.
    14. Mamatzakis, Emmanuel & Xu, Bingrun, 2016. "Managerial attributes and equity mutual fund performance: evidence from china," MPRA Paper 76139, University Library of Munich, Germany.
    15. Li Xian Liu & Fuming Jiang & Jizhong Li & Omar Al Farooque, 2021. "Antecedents of Equity Fund Performance: A Contingency Perspective," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 24(01), pages 1-40, March.
    16. Capocci, Daniel & Hubner, Georges, 2004. "Analysis of hedge fund performance," Journal of Empirical Finance, Elsevier, vol. 11(1), pages 55-89, January.
    17. Navone, Marco & Pagani, Marco, 2015. "Brothers from different mothers how distribution fees change investment behavior," Journal of Banking & Finance, Elsevier, vol. 51(C), pages 12-25.
    18. Han, Jae-Joon & Kang, Kyeong-Hoon & Won, Seungyeon, 2013. "Fund expenses and vertical structures of the fund industry," Economic Modelling, Elsevier, vol. 35(C), pages 856-864.
    19. Sofi Mohd Fikri & M. H. Yahya, 2019. "The Fund Characteristics, Fees, and expenses structure between Conventional and Islamic Mutual Fund," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 15(1), pages 157-190.
    20. Mikhail Anufriev & Te Bao & Angela Sutan & Jan Tuinstra, 2015. "Fee structure, return chasing and mutual fund choice: an experiment," Working Paper Series 30, Economics Discipline Group, UTS Business School, University of Technology, Sydney.

    More about this item

    Keywords

    Mutual Funds; Performance; Fees; Funds Classifications; G11; G12;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jecfin:v:39:y:2015:i:3:p:454-477. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.