Managing Mutual Funds or Managing Expense Ratios? Evidence from the Greek Fund Industry

34 Pages Posted: 26 Sep 2007 Last revised: 15 Mar 2011

See all articles by Vassilios Babalos

Vassilios Babalos

Department of Accounting & Finance, Technological Educational Institute of Peloponnese; University of Piraeus - Department of Banking and Financial Management

Alexandros Kostakis

University of Liverpool Management School; University of Manchester - Manchester Business School

Nikolaos Philippas

University of Piraeus - Department of Business Administration

Date Written: March 13, 2011

Abstract

This study examines the expenses' policy of the domestic equity funds in a small emerging market, Greece, with an oligopolistic, bank dominated financial system as it grows to maturity. Constructing a unique dataset of the non-publicly available expense ratios charged by these funds, we examine the impact these expenses have on the funds' performance and flows. The main conclusion is that the funds' performance is negatively related to expenses, while investors' flows are not directly affected by expenses. Furthermore, the funds affiliated with one of the three major domestic banking groups achieve higher performance and attract higher net flows in comparison to their competitors.

Keywords: Mutual funds, Expense ratio, Emerging markets, Performance attributes

JEL Classification: G14, G15, G21, G23

Suggested Citation

Babalos, Vassilios and Kostakis, Alexandros and Philippas, Nikolaos, Managing Mutual Funds or Managing Expense Ratios? Evidence from the Greek Fund Industry (March 13, 2011). Journal of Multinational Financial Management, Vol. 19, pp. 256-272, 2009, Available at SSRN: https://ssrn.com/abstract=1016779

Vassilios Babalos

Department of Accounting & Finance, Technological Educational Institute of Peloponnese ( email )

Antikalamos
Kalamata, KALAMATA 24100
Greece

HOME PAGE: http://www.teikal.gr

University of Piraeus - Department of Banking and Financial Management ( email )

80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR
Greece

Alexandros Kostakis

University of Liverpool Management School ( email )

Chatham Building
Liverpool, L69 7ZH
United Kingdom

HOME PAGE: http://www.alexkostakis.com

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Nikolaos Philippas (Contact Author)

University of Piraeus - Department of Business Administration ( email )

80, Karaoli & Dimitriou, Piraueus
Athens, 18534
Greece

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