Cheap Funds Hammer Expensive Funds…

August 2007
Journal of Financial Planning;Aug2007, Vol. 20 Issue 8, p12
Academic Journal
The article discusses an indicator of both performance and survival for mutual funds. Research performed by Russel Kinnel of Morningstar indicates that the higher a mutual fund's expense ratio is, the greater the probability of it underperforming, and the stronger the likelihood of the fund either being liquidated or merged out of existence. Among U.S. stock funds, Kinnel discovered, those in the top quintile with respect to expense ratios had double the attrition rate of those in the lowest quintile.


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