Performance and characteristics of actively managed retail equity mutual funds with diverse expense ratios

Authors

  • John A. Haslem Robert H. Smith School of Business, University of Maryland
  • H. Kent Baker bKogod School of Business, American University, Washington
  • David M. Smith School of Business, Center for Institutional Investment Management, University at Albany, SUNY

DOI:

https://doi.org/10.61190/fsr.v17i1.4905

Keywords:

Performance characteristics, Expense ratios, Mutual funds

Abstract

We investigate the relation between the performance and characteristics of 1,779 domestic, actively managed retail equity mutual funds with diverse expense ratios. We show that using expense ratio standard deviation classes is an effective method for characterizing fund expenses for investors. Using various performance measures including Russell-index-adjusted returns, the results indicate that superior performance, on average, occurs among large funds with low expense ratios, low trading activity, and no or low front-end loads. Performance is invariant with respect to whether funds have 12b-1 fees.

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Published

2008-03-30

Issue

Vol. 17 No. 1 (2008): FSR Spring 2008

Section

New Original Submission

License

Copyright (c) 2008 Academy of Financial Services

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How to Cite

Performance and characteristics of actively managed retail equity mutual funds with diverse expense ratios. (2008). Financial Services Review, 17(1), 49-68. https://doi.org/10.61190/fsr.v17i1.4905