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- Title
Are the Highest Mutual Fund Fees Justified by Their Performance?
- Authors
Fraś, Alicja
- Abstract
A mutual fund fee - being the price of a product - is related to the features of the product, like fund results, which are the base in the inves's purchase decision making process. In the present study, we examine whether there is a relation between good performance of the fund in the past (1- and 5-year-time horizons) and the current fee. The research for the Polish open-ended mutual funds market in 2017 indicates that there is no clear linear or non-linear relation between past performance and current charges. The computations were conducted using fitting curves packages in the R programming language and a correlation analysis. In the second part of the article, the strategies of investing in the cheapest and the most expensive funds were compared, with a split into fund types (stock, mixed and bond funds). The overall conclusion is that performance is not a driver for imposing higher fees on the investors. If it is not, then either fee distribution among the funds is random or other non-fundamental factors matters.
- Subjects
MUTUAL fund fees; MUTUAL funds; PRICES
- Publication
Management Issues / Problemy Zarządzania, 2018, Vol 16, Issue 2, p62
- ISSN
1644-9584
- Publication type
Article
- DOI
10.7172/1644-9584.74.3