Average Funds versus Average Dollars: Implications for Mutual Fund Research
32 Pages Posted: 6 Aug 2011 Last revised: 10 Apr 2014
Date Written: April 9, 2014
The top 5 percent of actively managed U.S. equity mutual funds in 2012 had greater aggregate TNA than the remaining 95 percent of funds combined. This skewness in size has implications for mutual fund research: What is true of the average fund is not necessarily true of the average dollar. We explore several key findings in the literature with an eye on this distinction. Our results indicate that if the goal of mutual fund research is to understand the importance of the industry to investors, then researchers should consider the experience of the average dollar, rather than the average fund.
Keywords: Mutual funds
JEL Classification: G20, G23, G29
Suggested Citation: Suggested Citation