A Comparative Analysis of the Expense Ratios of Domestic and International Open-End and Closed-End Equity Funds

Since it is difficult to determine whether fund performance is due to skill or luck, investors should use fees as a criterion when selecting funds because fees reduce returns. This study provides comparisons of expense ratios of domestic and international open-end and closed-end equity funds. A univ...

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Bibliographic Details
Published in:Financial counseling and planning 2001-07, Vol.12 (2), p.61
Main Authors: Martin, Rand, Malhotra, D K, McLeod, Robert W
Format: Article
Language:English
Subjects:
Closed end funds
Comparative analysis
Cost control
Datasets
Discounts
Distribution costs
Equity
Equity funds
Expenditures
Fees & charges
Investment advisors
Investment policy
Mutual funds
Ratios
Regression (Statistics)
Regression analysis
Scandals
Selection Criteria
Studies
Volatility
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Summary:Since it is difficult to determine whether fund performance is due to skill or luck, investors should use fees as a criterion when selecting funds because fees reduce returns. This study provides comparisons of expense ratios of domestic and international open-end and closed-end equity funds. A univariate analysis of expense ratios indicates that domestic open-end funds generally have higher expense ratios than domestic closed-end funds. This is accounted for by the existence of loads and 12b-1 plans. Among international funds, closed-end funds always have higher expenses. Regression analysis shows a weak relationship between level of expenses and returns. [PUBLICATION ABSTRACT]
ISSN:1052-3073