Regulation and the Rise in Asset-Based Mutual Fund Management Fees

Posted: 28 Mar 2002

See all articles by Joseph H. Golec

Joseph H. Golec

University of Connecticut - Department of Finance

Abstract

In this article I explain why asset-based fees are so common for mutual fund management companies and why the average fee has increased recently. I argue that Securities and Exchange Commission fee regulations make alternative fee types illegal or unattractive. Management companies can maintain higher fees because regulations and brand-name capital partly insulate them from competition, and because investors' cannot easily distinguish between performance-oriented and marketing-oriented fund companies. Index funds and unit investment trusts may offer competition to mutual funds in the future because they are designed to minimize management fees.

JEL Classification: G2, M52, K22

Suggested Citation

Golec, Joseph, Regulation and the Rise in Asset-Based Mutual Fund Management Fees. Available at SSRN: https://ssrn.com/abstract=300440

Joseph Golec (Contact Author)

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States

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