2018
DOI: 10.1016/j.econmod.2017.10.005
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Price competition in the mutual fund industry

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Cited by 19 publications
(23 citation statements)
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“…However, management company shareholders are in a better position than fund investors, due to the fund manager's behavior potentially aligning with the profit maximization of the company -rather than of the fund investors (Reynolds et al, 2006). This might be a reason as to why the level of a management fee does not reward a realized fund performance (Cooper et al, 2021;Gil-Bazo & Ruiz-Verdu, 2009;Parida & Tang, 2018); though the recent literature also considers the opposite scenario (He et al, 2018;Sheng et al, 2022;Vidal et al, 2015). This study works towards solving this problem since, unlike the demand side of the mutual fund market, its supply side is always very attentive.…”
Section: Literature Reviewmentioning
confidence: 99%
“…However, management company shareholders are in a better position than fund investors, due to the fund manager's behavior potentially aligning with the profit maximization of the company -rather than of the fund investors (Reynolds et al, 2006). This might be a reason as to why the level of a management fee does not reward a realized fund performance (Cooper et al, 2021;Gil-Bazo & Ruiz-Verdu, 2009;Parida & Tang, 2018); though the recent literature also considers the opposite scenario (He et al, 2018;Sheng et al, 2022;Vidal et al, 2015). This study works towards solving this problem since, unlike the demand side of the mutual fund market, its supply side is always very attentive.…”
Section: Literature Reviewmentioning
confidence: 99%
“…Increased market competition on its own does not decrease the expenses of the fund. Regulatory interventions are equally urging investors to realize the fee structure [28]. It became a global standard that while the mutual fund company board management has control over marketing decisions, regulators enforce caps on the marketing expenses.…”
Section: E Marketing Expensesmentioning
confidence: 99%
“…Gil-Bazo and Ruiz-Verdú (2008) also proposed a model in which worse-performing funds set fees that are greater or equal to those set by betterperforming funds. As Parida and Tang (2018) have demonstrated, the huge development of the mutual fund industry during the last decades, together with the subsequent rise in competition in the industry, may have not been sufficient to reduce their management and operating expenses, regardless of their pervasive implications on fund performance and performance persistence. In addition, Chang et al (2019) report evidence on the detrimental effect of portfolio fees on fund performance, since funds bearing low levels of expenses achieved significantly higher risk-adjusted funds than other comparable funds.…”
Section: Introductionmentioning
confidence: 99%