Mutual Fund Exit and Mutual Fund Fees

Posted: 26 Jul 2010

See all articles by Philip C. English

Philip C. English

American University - Kogod School of Business; Fox School of Business, Temple University

Ilhan Demiralp

University of Oklahoma - Division of Finance

William P. Dukes

Texas Tech University - Rawls College of Business

Date Written: July 21, 2010

Abstract

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

English, Philip C. and Demiralp, Ilhan and Dukes, William P., Mutual Fund Exit and Mutual Fund Fees (July 21, 2010). Journal of Law and Economics, Vol. 54. Available at SSRN: https://ssrn.com/abstract=1646649

Philip C. English (Contact Author)

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States
202-885-2745 (Phone)

Fox School of Business, Temple University ( email )

Philadelphia, PA 19122
United States
2152048141 (Phone)

Ilhan Demiralp

University of Oklahoma - Division of Finance ( email )

Norman, OK 73019
United States

William P. Dukes

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States
806-742-3419 (Phone)
806-742-2099 (Fax)

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