Mutual fund fees and performance: new insights

Garyn-Tal, Sharon

doi:10.1007/s12197-013-9257-z

Cited by 4 publications

(5 citation statements)

References 14 publications

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“…In contrast to the market efficiency hypothesis, several academic studies demonstrated a negative or non-existing relation between fees and fund performance (Gruber, 1996; Carhart, 1997; Ferreira et al , 2013; Garyn-Tal, 2015). Gruber (1996) found that the expense ratio for the best performing mutual funds increases at a slower pace than that of the worst performing ones.…”

Section: Literature Reviewmentioning

confidence: 93%

“…Ferreira et al (2013) found that higher-priced management generates higher gross returns, but returns are not high enough to cover the fees. Garyn-Tal (2015) finds that within each investment-style classification, there are no consistent relations between the expenses the fund’s charge and the alphas they earn. From a predictive standpoint, Ma et al (2019) did not find evidence of a relation between portfolio manager compensation and subsequent fund performance, either gross or net of fees.…”

Section: Literature Reviewmentioning

confidence: 98%

“…The relationship between fees and performance may be affected by the investment style or the size of the fund. Garyn-Tal (2015) has found a negative relationship between fees and performance. However, when analyzing different fund categories independently, the author found no significant relationships between the funds’ charge and the alphas they earn.…”

Section: Literature Reviewmentioning

confidence: 99%

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Performance determinants of European private equity real estate funds

Morri

Perini

Anconetani

2021

JERER

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Purpose The paper aims to investigate the performance determinants of European non-listed private equity real estate funds between 2001 and 2014. Design/methodology/approach Using a sample of 363 funds collected from the Inrev database, the analysis evaluated the impact of fees and other intrinsic characteristics of these funds, such as leverage, size and duration, on the funds’ performance, intending to enhance the understanding underlying their relationship. Findings The findings show a negative relationship between the return of the funds and redemption fee, performance fee and management fee. Conversely, marketing fees have a positive effect on performance. When analyzing the investment style, the results reveal inhomogeneous behaviors of leverage on funds’ performance. This variable has a positive impact on the return in core funds, while there is a negative relationship in value-added investments. Finally, the emphasis on the global financial crisis shows that the effects of the independent variables on the performance do not significantly change in different economic cycles. Practical implications The practical implication of the research is to understand whether an investor can direct its resources in a fund, leveraging on certain intrinsic characteristics that can be observed a priori. Originality/value Even if there is a considerable body of literature on determinants of performance in European non-listed real estate funds, little research has analyzed the role of fees in driving their results. Besides, this paper takes advantage of observations from different investment styles to emphasize the impact of higher or lower risk profiles and from the full economic cycle to understand the effects of the crisis period.

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Section: Literature Reviewmentioning

confidence: 93%

Section: Literature Reviewmentioning

confidence: 98%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Performance determinants of European private equity real estate funds

Morri

Perini

Anconetani

2021

JERER

View full text Add to dashboard Cite

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“…Moreover, there is a large body in the literature investigate the effect of fund-specific variables, such as size, flow and fees (see for example: (Barber et al, 2016;Elton et al, 2012;Garyn-Tal, 2015)). The risk condition and its influence on fund performance has attracted researchers' attention more recently.…”

Section: Fund Performancementioning

confidence: 99%

Sovereign CDS and mutual funds: Global evidence

Alsubaiei

Calice

Vivian

2021

Journal of International Financial Markets, Institutions and Mo

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“…(Ferreira, Keswani et al 2013) There is mixed empirical evidence on the relationship between fund fees and performance. The samples in the US and international mutual funds, Carhart (1997), Dellva andOlson (1998), Ferreira, Keswani et al (2013), Cooper, Halling et al (2020) found a negative relationship between fund expenses and its returns while Berk and Binsbergen (2015) found a positive correlation between current fund expenses and future performance and Garyn-Tal (2015) found no relation between fees and performance when taking into account fund classification.…”

Section: 2mentioning

confidence: 99%

The relationship between fees and performance of domestic equity funds in Thailand

Suphapitakpaiboon

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This study inclusively examines the relationship between fund fees and performance of open-end domestic equity funds in Thailand from 2010 to 2019 to analyze the domestic-equity fund market in 2 main dimensions: the market competitive and conflict-of-interest between the duties of asset management companies (AMCs) to their parent bank and to unitholders through fund fee channel. The study investigates the relationship of (1) fund fees, (2) fund fees set by bank subsidiaries, and (3) fund fees set by large-bank subsidiaries with its performance in term of both returns over benchmark and Jensen’s alpha. Based on the results, investors paid higher fees to AMCs without compensating the fees with superior performance from investment in Thai domestic-equity funds on average. These also implies the domestic equity funds market is not able to be concluded that the market is highly competitive. For funds managed by bank subsidiaries, the result reports that there is statistically significant in the additional negative impact from the fees set by bank-subsidiaries on the fund performance. Thus, the fees set by bank-subsidiaries do matter as it could higher deteriorate the fund performance. One of underlying concept to explain this is because of bank conglomerate structure in mutual fund market, there is possible that AMCs may involve in the activities such as increase in fund fees collected from unitholders that was beneficial to parent bank in term of increase in its revenue rather than maximizing the interests or fund returns to unitholders. Moreover, to inclusively study in conflict-of-interest issue through fund fee channel, the result significantly shows that investors would significantly pay higher fees especially to non-large bank subsidiaries and not receive superior performance.

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Mutual fund fees and performance: new insights

Cited by 4 publications

References 14 publications

Performance determinants of European private equity real estate funds

Performance determinants of European private equity real estate funds

Sovereign CDS and mutual funds: Global evidence

The relationship between fees and performance of domestic equity funds in Thailand

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