The Impact of Expenses on Equity Mutual Fund Performance

Apap, Antonio; Griffith, John M.
February 1998
Journal of Financial Planning;Feb1998, Vol. 11 Issue 1, p76
Academic Journal
This article examines the relationship between the performance of equity mutual funds and the various expenses incurred by investors, specifically sales charges, 12b-1 fees and expense ratios. The intention of this study is to resolve the conflicts that exist in the current literature regarding the impact of expenses on the performance of equity mutual funds. Many investors use past performance when forming expectations of future performance and as one of many criteria when choosing mutual funds for investment. Given the growth in the number of mutual funds and in the total dollars invested in them, one could expect that the expenses that mutual fund investors incur are clearly defined and their possible benefits understood. Finally, one might argue that mutual fund performance could be improved by employing the best personnel and by using expensive research facilities. Thus, the expectation is that higher expense ratios will lead to better future performance.


Related Articles

  • The Impact of Level of Purchase Decision Involvement on the Investment Behavior of Mutual Fund Investors. Mishra, Sanjay Kr.; Kumar, Manoj // IUP Journal of Behavioral Finance;Mar2012, p27 

    This study investigates the impact of level of Purchase Decision Involvement (PDI) of Mutual Fund (MF) investors on their investment behavior through a survey of 268 MF investors. Overall the results suggest that the level of PDI significantly impacts the investment behavior of MF investors....

  • SHOULD YOU DUMP TAINTED FUNDS?  // Consumer Reports;Mar2004, Vol. 69 Issue 3, p13 

    Reports on the investigation being conducted on U.S. mutual-fund companies for abusive trading practices. Legality of late trading; List of financial institutions that were investigated for market timing; Impact of late trading on investors.

  • U.S. Equity Funds Lose $13B in Flows Since June.  // Money Management Executive;9/10/2007, Vol. 15 Issue 34, p7 

    The article reports on the U.S. equity funds flow as of June 2007. Base on the reports disclosed by Dow Jones, investors withdrew $4.1 billion from U.S. equity mutual funds and in August, early projections put net outflows at $9 billion. Moreover, it was disclosed that although the average U.S....

  • Big is Beautiful, Say PE Investors. Pfeuti, Elizabeth // AiCIO News;2013, p1 

    Private equity funds closing in the third quarter raised $311 billion, outpacing the $259 billion gathered in the same quarter last year.

  • Scottish Equitable: grabbing property opportunity.  // MarketWatch: Global Round-up;October 2004, Vol. 3 Issue 10, p100 

    This article reports that recent adverse market conditions have created a risky property sector, yet interest in property funding has risen steadily of late from both individual and institutional investors. Scottish Equitable is the latest fund manager to recognize that confident property...

  • Ready and waiting.  // Money Marketing (Online Edition);6/11/2012, p23 

    In this article the author discusses what investors can do with funds. He states that though some suggest that since the market will fall, the best strategy would be to sell and buy back, though he doesn't agree with it as the market is already inexpensive. He mentions that he favors stable...

  • World Equity Fund Inflows Outpace Domestic Rivals. Amend, James M. // Money Management Executive;5/30/2005, Vol. 13 Issue 21, p1 

    The article reports that in contrast to the declines in the broader market from March to April, 2005 equity mutual fund inflows increased month over month by about $3.5 billion. The increases were propelled by the growth in world equity funds, which increased from $7 billion in March to $11.3...

  • SMALL IS BOUNTIFUL.  // Bulletin with Newsweek;1/20/2004, Vol. 122 Issue 6404, p57 

    Stockmarket investors should concentrate on smaller companies, says the article. When it comes to investing, smaller can often be better. Equity funds that specialise in small companies have been among the strongest performers in recent months, and those investors who do their homework could...

  • DO HEDGE FUNDS ADD VALUE FOR INVESTORS? Epars, Gabriel; Maniam, Balasundram; Leavell, Hadley // Journal of International Finance Studies;2014, Vol. 14 Issue 1, p87 

    This paper discusses whether hedge funds create value for investors. To determine whether those investment vehicles add value, three dimensions will be taken into account. First, this study will analyse whether hedge funds have had higher returns than mutual funds and major equity indices for...


Read the Article


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

Try another library?
Sign out of this library

Other Topics