Mutual Fund Exit and Mutual Fund Fees
Posted: 26 Jul 2010
Date Written: July 21, 2010
We examine the effect of mutual fund fee structure on mutual fund exit mode and timing. The evidence presented herein is consistent with mutual fund sponsor or manager fee maximization, increased conflicts of interest for funds charging 12b-1 fees and higher management fees, and a pecking order for mutual fund exit method. Specifically, mutual fund exits that result in decreased fee income relative to exits that do not are delayed and exit strategies that retain fee income are more likely than strategies that do not.
Keywords: mutual fund, liquidation, merger, exit decision, 12b-1 fee, management fees
JEL Classification: G2, G28, L11
Suggested Citation: Suggested Citation