Performance and Characteristics of Actively Managed Retail Equity Mutual Funds with Diverse Expense Ratios

30 Pages Posted: 12 May 2008 Last revised: 2 Oct 2018

See all articles by John A. Haslem

John A. Haslem

University of Maryland - Robert H. Smith School of Business

H. Kent Baker

American University - Kogod School of Business

David M. Smith

State University of New York at Albany - School of Business

Date Written: May 27, 2008

Abstract

We investigate the relation between the performance and characteristics of 1,779 domestic, actively managed retail equity mutual funds with diverse expense ratios. We show that using expense ratio standard deviation classes is an effective method for characterizing fund expenses for investors. Using various performance measures including Russell-index-adjusted returns, the results indicate that superior performance, on average, occurs among large funds with low expense ratios, low trading activity, and no or low front-end loads. Performance is invariant with respect to whether funds have 12b-1 fees.

Keywords: mutual funds, actively managed retail, performance, characteristics, expense ratios

JEL Classification: G2, G23, G28

Suggested Citation

Haslem, John A. and Baker, H. Kent and Smith, David McNeil, Performance and Characteristics of Actively Managed Retail Equity Mutual Funds with Diverse Expense Ratios (May 27, 2008). Available at SSRN: https://ssrn.com/abstract=1128983 or http://dx.doi.org/10.2139/ssrn.1128983

John A. Haslem (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742
United States
202-387 2025 (Phone)

H. Kent Baker

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States
202-885-1949 (Phone)
202-885-1992 (Fax)

David McNeil Smith

State University of New York at Albany - School of Business ( email )

1400 Washington Ave.
Albany, NY 12222
United States

HOME PAGE: http://www.albany.edu/ciim

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