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Full-Text Articles in Social and Behavioral Sciences
"Does It Pay To Be Informed?" Expenditure Efficiency In The Us Mutual Fund Industry, Jan Cerny
"Does It Pay To Be Informed?" Expenditure Efficiency In The Us Mutual Fund Industry, Jan Cerny
Gettysburg Economic Review
The mutual fund industry would like us to believe that fund expenses are justifiable by their extensive management expertise, security analysis and the consequent delivery of returns that exceed the market performance. Management know-how is costly and thus it drives up the expenditure of actively managed mutual funds and potentially lowers their net returns. Nevertheless the fund managers argue that their contributions to the returns fully outweigh their costs and in general their trading strategies add value to the investors. On the other hand many academics hold that such claims are fundamentally misleading and actively managed funds cannot continuously outperform …
Efficiency Of The Mutual Fund Industry: An Examination Of U.S. Domestic Equity Funds: 1995-2004, Chase J. Stewart
Efficiency Of The Mutual Fund Industry: An Examination Of U.S. Domestic Equity Funds: 1995-2004, Chase J. Stewart
Gettysburg Economic Review
Investors have the ability to choose between two different management styles in the mutual fund industry. These two management styles differ in both the investment strategy type the fund executes and management costs, which are charged to the funds’ investors. First, investors may invest their funds in index funds, which employ a passive investment strategy. Here, investors expect to earn a rate of return equivalent to the market index—minus a small management fee—which the fund seeks to track. Alternatively, investors may choose active fund management. The returns of these mutual funds rely on stock selection ability of portfolio managers. Active …