TY - JOUR
T1 - The cross-section of mutual fund fee dispersion
AU - Iannotta, Giuliano Orlando
AU - Navone, Marco
PY - 2012
Y1 - 2012
N2 - In this paper, we empirically analyze the factors affecting the cross section of mutual fund fee dispersion.
In the context of equity mutual funds, fee dispersion stems primarily from the heterogeneity of products,
clienteles and production functions. However, the relevant theory predicts that search costs can also generate
fee dispersion. By controlling for observable sources of heterogeneity, we find that fee dispersion
decreases with fund size and age, as well as with the amount of assets under management of the investment
company. In addition, we find lower levels of fee dispersion for funds that charge marketing and
distribution fees. Although we cannot rule out the possibility that these factors are a proxy for some
unobserved source of heterogeneity, our results are also consistent with the theoretical prediction that
search costs positively affect fee dispersion.
AB - In this paper, we empirically analyze the factors affecting the cross section of mutual fund fee dispersion.
In the context of equity mutual funds, fee dispersion stems primarily from the heterogeneity of products,
clienteles and production functions. However, the relevant theory predicts that search costs can also generate
fee dispersion. By controlling for observable sources of heterogeneity, we find that fee dispersion
decreases with fund size and age, as well as with the amount of assets under management of the investment
company. In addition, we find lower levels of fee dispersion for funds that charge marketing and
distribution fees. Although we cannot rule out the possibility that these factors are a proxy for some
unobserved source of heterogeneity, our results are also consistent with the theoretical prediction that
search costs positively affect fee dispersion.
KW - fee
KW - mutual fund
KW - fee
KW - mutual fund
UR - http://hdl.handle.net/10807/41081
UR - http://dx.medra.org/10.1016/j.jbankfin.2011.09.013
U2 - 10.1016/j.jbankfin.2011.09.013
DO - 10.1016/j.jbankfin.2011.09.013
M3 - Article
SN - 0378-4266
VL - 2012
SP - 846
EP - 856
JO - JOURNAL OF BANKING & FINANCE
JF - JOURNAL OF BANKING & FINANCE
ER -