Mutual Fund Fees Around the World

Posted: 17 Mar 2009

See all articles by Ajay Khorana

Ajay Khorana

Georgia Institute of Technology - Finance Area

Henri Servaes

London Business School; Centre for Economic Policy Research (CEPR)

Peter Tufano

University of Oxford - Said Business School; National Bureau of Economic Research (NBER); University of Oxford - Said Business School

Date Written: March 2009

Abstract

Using a new database, we study fees charged by 46,580 mutual fund classes offered for sale in 18 countries, which account for about 86% of the world fund industry in 2002. We examine management fees, total expense ratios, and total shareholder costs (including load charges). Fees vary substantially across funds and from country to country. To explain these differences, we consider fund, sponsor, and national characteristics. Fees differ by investment objectives: larger funds and fund complexes charge lower fees; fees are higher for funds distributed in more countries and funds domiciled in certain offshore locations (especially when selling into countries levying higher taxes). Substantial cross-country differences persist even after controlling for these variables. These remaining differences can be explained by a variety of factors, the most robust of which is that fund fees are lower in countries with stronger investor protection.

Keywords: G2, L11

Suggested Citation

Khorana, Ajay and Servaes, Henri and Tufano, Peter, Mutual Fund Fees Around the World (March 2009). The Review of Financial Studies, Vol. 22, Issue 3, pp. 1279-1310, 2009. Available at SSRN: https://ssrn.com/abstract=1359529 or http://dx.doi.org/hhn042

Ajay Khorana (Contact Author)

Georgia Institute of Technology - Finance Area ( email )

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Henri Servaes

London Business School ( email )

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United Kingdom
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+44 20 7000 8201 (Fax)

HOME PAGE: http://faculty.london.edu/hservaes/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Peter Tufano

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0) 1865 288551 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0) 1865 288551 (Phone)

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