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Some Clarity on Mutual Fund Fees
| Content Provider | Scilit |
|---|---|
| Author | Brown, Stewart L. Pomerantz, Steven |
| Copyright Year | 2017 |
| Description | Journal: SSRN Electronic Journal The literature on mutual fund fees is unsettled. An important issue is the apparent inelasticity of management fees. The paper surveys fees and asset levels of the universe of mutual funds including all open end, closed end and ETFs. It reveals that between 2005 and 2015 management fees on actively managed open-end funds were flat while assets more than doubled. The results are inexplicable in economic terms but consistent with the legal environment in which fund sponsors operate. The fee anomaly is traced to the 1970 amendment to the Investment Company Act. The amendment’s solution to a structural anomaly of mutual fund governance was ineffective. By comparing management fees to marginal costs, we estimate that the investing public is overcharged by about $30 billion per year. We also show that the universe of publicly traded mutual fund sponsors earn statistically significant excess returns over long time periods. |
| Related Links | https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1567&context=jbl https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3050589 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.3050589 |
| Journal | SSRN Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2017-10-10 |
| Access Restriction | Open |
| Subject Keyword | Journal: SSRN Electronic Journal Mutual Fund Management Fees |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |
