TITLE

Low Fund Expenses Not Necessarily Performance Predictors . .

PUB. DATE
July 2004
SOURCE
Journal of Financial Planning;Jul2004, Vol. 17 Issue 7, p20
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article provides information on a study by Lipper Inc., which claims against conventional wisdom that lower mutual fund expenses are more likely to outperform their higher-expense counterparts on a net return basis. Using three-year increments and including all fund share classes, the study found that lower expense ratios are associated with higher returns, but only for no-load and institutional funds. With load shares, however, higher expense ratios are associated with higher returns. As for the issue of 12b-1 fees, the study considers them dead-weight cost for no-load shares but somewhat mitigated for load shares because advisor-counseled investors are less likely to sell into market weaknesses. Some observers have allegedly criticized the study for using only three-year periods, but the study's author counters that such is that timeframe investors and their advisors typically gauge a fund's performance.
ACCESSION #
13700573

 

Related Articles

  • High-Yield Bonds Proved a Boon To Mutual Fund Managers in '04. Johnson, Matthew; Fine, Jacob // Bond Buyer;1/7/2005, Vol. 351 Issue 32045, p1 

    The article informs those municipal bond mutual funds that tried to walk the straight line last year and maintain high credit quality were largely left in the dust in Lipper Inc.'s 2004 total return rankings. High-yield bonds rallied as investors clamored to improve their returns amid the...

  • Building a solid investment base with index mutual funds. Leckey, Andrew // Journal of Business (10756124);3/6/2008, Vol. 23 Issue 6, p33 

    The article discusses how to build a solid investment base with index mutual funds. According to Lipper Inc., index mutual funds seek to mirror the performance of a given stock or bond index. The author suggests examining each fund closely to avoid overlap within a personal portfolio and...

  • Mortgage Funds Sink in 2nd Q.  // National Mortgage News;8/2/2004, Vol. 28 Issue 44, p18 

    Focuses on the association of mutual funds invested in adjustable-rate mortgage securities with rankings among mortgage mutual funds in the second quarter of 2004 according to data from Lipper Inc. Average cumulative total return produced by the adjustable rate mortgages funds; Rate of return of...

  • Equity Funds Post Third Year of Positive Returns in 2005. Abramovich, Giselle // Money Management Executive;3/6/2006, Vol. 14 Issue 9, p6 

    The article discusses findings in the report from Lipper titled "Global Themes in the Mutual Fund Industry: A Review of the Global Pooled Investment Management Industry." Despite adverse factors such as oil prices, the war in Iraq, and natural disasters, equity mutual funds returned 9.275 and...

  • Day-of-the-Week Effects Among Mutual Funds. Miller, Edward M.; Prather, Larry J.; Mazumder, M. Imtiaz // Quarterly Journal of Business & Economics;Summer/Autumn2003, Vol. 42 Issue 3/4, p113 

    We extend the evidence on day-of-the-week effects by examining the return patterns of ten open-end mutual fund asset classes to establish whether previously observed predictabilities in stock returns are reflected in mutual fund asset-class returns. This determination is consequential because...

  • All Geared up. Freeman, Peter // Money (Australia Edition);Oct2005, Issue 9, p76 

    This article presents an update on the performance of geared share funds in Australia, as of October 2005. In the year 2004 to 2005, five geared funds that focus on Australian shares have delivered a return of 34% or more, with three of the five generating more than 50%. Instead of simply...

  • Funds keep their focus on US, UK and Europe. Bone, Alison // Money Marketing;3/11/2004, p22 

    Reports on trends relating to the mutual fund market in the U.S., Great Britain and Europe. Equity funds; Investment trends, issues and economic conditions; Rate of returns; Asset allocation; Business opportunities.

  • Dodge & Cox International Stock. Lyons, Gareth // Morningstar FundInvestor;Apr2006, Vol. 14 Issue 8, p4 

    Focuses on the Dodge & Cox Stock DODFX fund. Inclusion of Sanofi-Synthelabo and Vodafone Group VOD in the stocks where the fund has increased its stakes; Expense ratio of the fund; Rate of return of the fund in 2006.

  • Greenspring and Turner Small Growth Bust Out. Wallace, Karen // Morningstar FundInvestor;Apr2006, Vol. 14 Issue 8, p13 

    Focuses on several mutual funds. Rate of return of the Greenspring GRSPX fund as of March 31, 2006; Advantage of the low costs of Vanguard GNMA VFIIX; Exposure of the Legg Mason Value LMVTX fund to energy stocks.

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics