Topic
Management fee
About: Management fee is a research topic. Over the lifetime, 887 publications have been published within this topic receiving 15581 citations. The topic is also known as: Management fee.
Papers published on a yearly basis
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Papers
TL;DR: In this paper, the authors present statistical techniques for testing forecasting ability with a particular emphasis on the market-timing ability of investment managers, using both the parametric and nonparametric tests for the evaluation of forecasting ability presented by Henriksson and Merton.
Abstract: The evaluation of investment performance is of importance for allocating investment funds efficiently and setting appropriate management fees. Because actively managed mutual funds are an important form of investment in the United States, a valid question is whether the active management has achieved a sufficient increase in returns to offset the associated costs of information and transactions, as well as the management fees charged. As a corollary, the ability to earn superior returns based on superior forecasting ability would be a violation of the efficient markets hypothesis' and would have far-reaching implications for the theory of finance.2 Henriksson and Merton (1981) present statistical techniques for testing forecasting ability with a particular emphasis on the market-timing ability of investment managers. The tests are derived from the basic model of market timing developed by Merton (1981), where the forecaster predicts when stocks will outperform riskless securities and when riskless securities will outperform stocks but does not predict the magnitude of the relative returns. The evaluation of the performance of investment managers is a topic of considerable interest to practitioners and academics alike. Using both the parametric and nonparametric tests for the evaluation of forecasting ability presented by Henriksson and Merton, the market-timing ability of 116 open-end mutual funds is evaluated for the period 1968-80. The empirical results do not support the hypothesis that mutual fund managers are able to follow an investment strategy that successfully times the return on the market portfolio.
770 citations
TL;DR: In this article, the authors examined the role of fund family structure in the economics of mutual fund investments and found that the fund family's strategy for maximizing firm value by maximizing assets under management has at least four dimensions: fee schedules, distribution channels, breadth of fund offerings, and performance.
Abstract: Incubation is a strategy for initiating new funds, where multiple funds are started privately, and, at the end of an evaluation period, some are opened to the public. Consistent with incubation being used by fund families to increase performance and attract flows, funds in incubation outperform nonincubated funds by 3.5% risk-adjusted, and when they are opened to the public they attract higher flows. Postincubation, however, this outperformance disappears. This performance reversal imparts an upward bias to returns that is not removed by a fund size filter. Fund age and ticker creation date filters, however, eliminate the bias. The prevalence of the fund family structure in the asset management industry suggests that families play an important role in the economics of mutual fund investments. A number of papers have examined the strategic decisions of families. An important message of this research is that the fund family's strategy for maximizing firm value by maximizing assets under management has at least four dimensions: fee schedules, distribution channels, breadth of fund offerings, and performance. By setting a fund's fee schedules (i.e., management fee, 12b-l fee, etc.),1 choosing a particular distribution channel (brokered or direct),2 and deciding on the overall breadth of their fund offerings (e.g., starting
760 citations
TL;DR: A theory of human capital is in the process of formulation, and the primary question is "What is the contribution of changes in the quality of people to economic growth?" The academic economists first raised the question after their research showed that production in developed economies had been increasing much faster than could be explained by inputs of physical capital and additions to the labor force.
Abstract: A THEORY of human capital is in the process of formulation. The primary question is "What is the contribution of changes in the quality of people to economic growth?" The academic economists first raised the question after their research showed that production in developed economies had been increasing much faster than could be explained by inputs of physical capital and additions to the labor force. But the wide interest which the question has aroused indicates much more than academic curiosity. It reflects the desires and aspirations of people throughout the world-people anxious to add weight to their demands for action against disease and illiteracy by showing that such action is not only humanitarian, but will make a major contribution to economic growth as well. Though research on the return to investment in people is barely getting started, even the most tentative conclusions have been widely quoted. Preliminary indications that the rate of return on investment in people is high have been seized upon in a growing number of countries as justification for in-
660 citations
TL;DR: In this article, the authors examine survivorship bias in hedge fund returns by comparing two large databases and find that the survivorship biases exceed 2% per year, and that the biases are different across styles.
Abstract: In this paper, I examine survivorship bias in hedge fund returns by comparing two large databases. I find that the survivorship bias exceeds 2% per year. Results of survivorship bias by investment styles indicate that the biases are different across styles. I reconcile the conflicting results about survivorship bias in previous studies by showing that the two major hedge fund databases contain different amounts of dissolved funds. Empirical results show that poor performance is the main reason for a fund's disappearance. Furthermore, I find that there are significant differences in fund returns, inception date, net assets value, incentive fee, management fee, and investment styles for the 465 common funds covered by both databases. Mismatching between reported returns and the percentage changes in NAVs can partially explain the differences in returns.
620 citations
TL;DR: In this paper, the authors use administrative data and link them to survey responses and behavior in incentivized social preferences experiments to find out why individual investors hold socially responsible (SRI) mutual funds.
Abstract: Why do individual investors hold socially responsible (SRI) mutual funds? We use administrative data and link them to survey responses and behavior in incentivized social preferences experiments. Our results show that intrinsic social preferences are crucial for investment decisions and that social signaling also plays a role. Contrasting standard finance theory, financial motives are of limited importance. In fact, socially responsible investors expect to earn lower returns on SRI than on conventional funds and pay higher management fees. This shows that a large group of investors is willing to forgo financial performance to invest in accordance with their social values.
469 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2025 | 3 |
| 2024 | 3 |
| 2023 | 7 |
| 2022 | 8 |
| 2021 | 13 |
| 2020 | 19 |