Multiple-share classes and mutual fund composition

Authors

  • Matthew R. Morey Pace University, New York

DOI:

https://doi.org/10.61190/fsr.v13i1.4781

Keywords:

Loads, Composition, Mutual funds, Multiple-share classes

Abstract

This article investigates the effect of multiple-share classes on mutual fund composition. Using 10 annual samples of data, we find that before the mass adoption of multiple-share classes, load funds held less cash relative to no-load funds. However, after most load funds had adopted multiple-share classes, we find no difference in cash held between load and no-load funds. These results suggest that the rise of multiple-share-class funds has reduced the compositional advantages of load funds, and hence makes the case for investors to hold single-class, no-load funds.

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Published

2004-03-30

Issue

Vol. 13 No. 1 (2004): FSR Spring 2004

Section

New Original Submission

License

Copyright (c) 2004 Academy of Financial Services

Creative Commons License

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Author(s) retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows to share the work with an acknowledgment of the work's authorship and initial publication in this Journal.

This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.

How to Cite

Multiple-share classes and mutual fund composition. (2004). Financial Services Review, 13(1), 33-56. https://doi.org/10.61190/fsr.v13i1.4781