We test the controversial argument that the mutual fund industry makes excessive profits from fund investors through sales expenses (12b-1 fees in the United States), which has attracted the attention of the media, practitioners, and the financial regulatory authorities. Unlike previous studies that treat mutual fund expenses as a whole, we separately identify management expenses and sales expenses using Korean data. We find that high management expense funds outperform low management expense funds in terms of gross returns. In addition, their outperformance sufficiently offsets their higher expense. In contrast, we find no evidence that higher sales expenses are related to better performance. We also find a significant negative relation between sales expenses and fund flows but fail to find such a relation between management expenses and flows. We also show that aggregate active mutual funds can outperform aggregate passive mutual funds when excessive sales expenses are eliminated, although active investing per se is a negative-sum game in the sense of equilibrium accounting.
Keywords: fund expenses, fund fees, fund performance, investor learning, equilibrium accounting
학술대회/행사
학술대회 및 야외답사
학술대회/행사
[2013년 제 1차] Effects of Sales Expenses and Management Expenses o
작성자 : 관리자
조회수 : 882
게시일 :
2013-03-04