© 2022 Published by VŠB-TU Os a a. All igh s ese ed. ER-CEREI, Volume 25: 105–112 (2022).
ISSN 1212-3951 (P in ), 1805-9481 (Online)
The de e minan s o mu ual und ees: In e na-
ional e idence
Li ia Mendes CARNEIROa
*
a Depa men o Economics and Managemen , Uni e si y o Pa ia, Via S. Felice Al Monas e o 5, 27100 Pa ia,
I aly.
Abs ac
The equi y und indus y has g own apidly o e he pas decades. The ees a e one o he ac o s ha ema kably
a ec he low o unds in his indus y. This pape in es iga es he key de e minan s o ac i e unds’ o al ex-
pense a ios (TERs) ac oss 32 coun ies be ween 2002 and 2018. The esul s indica e ha la ge unds and man-
agemen companies cha ge lowe ees, while in e na ional unds ha e highe TERs. Bu , he highe he mu ual
und indus y’s concen a ion is he lowe he ac i e unds’ ees. My ou comes also e eal ha unds pas pe o -
mances nega i ely impac he TERs cha ged by ac i e equi y unds and less ac i e unds ha e highe ees. These
esul s may sugges ha in es o s ha e he e ogeneous p e e ences o se ices o e en he exis ence o in es o s
wi h dis inc pe o mance sensi i i ies.
Keywo ds
Asse managemen , equi y unds, ac i e managemen , und ees.
JEL Classi ica ion: G11, G14, G15.
*
li ia.mendesca nei o01@uni e si adipa ia.i
106 Ekonomická e ue – Cen al Eu opean Re iew o Economic Issue 25, 2022
The de e minan s o mu ual und ees: In e na-
ional e idence
Li ia Mendes CARNEIRO
1. In oduc ion
The equi y und indus y has expanded s eadily o e
he pas ew decades. Despi e he con ac ion su e ed
by he sec o du ing he 2007-2008 global inancial c i-
sis, he eco e y was accele a ed, wi h he o al olume
o asse s unde managemen in equi y unds a ound he
wo ld ising om US$10.9 illion in Decembe 2011
o US$28.3 illion in Decembe 2020 (In es men
Company Ins i u e, 2021). No e en he impac o he
COVID-19 pandemic on inancial ma ke s du ing 2020
was able o p e en he indus y om g owing. The o-
al olume o asse s unde managemen inc eased abou
15.5% be ween he end o 2019 and he end o 2020. In
he Uni ed S a es, he asse s unde managemen g ow h
b ough economies o scale and mo e compe i ion o
he equi y und indus y. Consequen ly, he a e age o-
al expense a io o ac i e equi y mu ual unds has
allen om 1.08 pe cen in 1996 o 0.71 pe cen in 2020
(In es men Company Ins i u e, 2021). Howe e , his
sha p educ ion in ees was no obse ed in all coun ies
a ound he wo ld.
O e he pas ew decades, a g owing body o li e -
a u e has explo ed he ela i e alue o ac i e manage-
men . Some s udies did no ind e idence ha ac i e
unds can gene a e excess e u ns (Ca ha , 1997; Fama
and F ench, 2010; Jensen, 1968; Malkiel, 1995), while
o he pape s ha e iden i ied ha he bene i s o collec -
ing in o ma ion a e a leas equal o i s cos s (Kacpe -
czyk and Se u, 2007; We me s, 2000). Recen ly, many
pape s ha e s a ed explo ing he cha ac e is ics o he
equi y und indus y mo e b oadly. Kho ana, Se aes
and Tu ano (2005) ound e idence ha coun ies wi h
s onge laws and egula ions ha e a la ge und indus-
y. Pás o , S ambaugh and Taylo (2015) no ed ha a
und’s abili y o ou pe o m benchma ks dec eases as
he size o he und indus y inc eases.
Besides, he e has been a g owing numbe o s udies
in ecen yea s explo ing he possible impac s in he in-
es men und indus y a ising om he emendous
g ow h o passi e in es men s (Ben-Da id, F anzoni
and Moussawi, 2018; Ca nei o, Eid Junio and
Yoshinaga, 2021; C eme s e al., 2016). Despi e he e-
cen ad ancemen in he li e a u e on he equi y unds
indus y, he e is s ill li le e idence on he aspec s de-
e mining he wide a ia ion in managemen ees ha
exis s in his indus y. Ho acsu and Sy e son (2004)
was one o he i s wo ks o in es iga e he easons be-
hind he as numbe o unds and he conside able dis-
pe sion o ees in S&P 500 index unds, whe e all unds
a e cha ac e ized by a simila e u n pa e n. The au-
ho s iden i ied he p esence o ex a-po olio mecha-
nisms ha explain his wide a ia ion o ees, such as
nonpo olio di e en ia ion and in o ma ion ic ions.
Howe e , Choi, Laibson and Mad ian (2014), using an
expe imen wi h S&P 500 index unds, ound ha indi-
idual in es o s ail o minimize ees and nonpo olio
se ice di e en ia ion is no behind hese nonop imal
po olio decisions.
Adams, Mansi and Nishikawa (2012) also explo ed
he compe i ion in he US open-ended equi y index
unds ma ke and a gued ha disp opo iona ely high
ees a e p e alen in unds wi h mul iple sha e classes
and hose wi h weak go e nance s uc u es. Mean-
while, Coa es and Hubba d (2007) p o ided e idence
ha mu ual und in es o s a e sensi i e o ees. The li -
e a u e on unds’ ees ou side he Uni ed S a es is e en
a e . Ge anio and Zano i (2005) in es iga ed ees in
he I alian und indus y, inding e idence ha la ge
unds, la ge und manage s and unds domiciled
ab oad cha ge lowe cos s. Kho ana, Se aes and Tu-
ano (2008) analyzed he ees cha ged by di e en clas-
ses o mu ual unds o e ed o sale in 18 coun ies in
2002, iden i ying ha la ge unds and unds om
coun ies wi h g ea e in es o p o ec ion cha ge lowe
ees, while ees a e highe o in e na ional unds and
o sho e unds.
This pape con ibu es o he li e a u e on he com-
pe i ion in he open-ended ac i e equi y unds indus y
by in es iga ing he key de e minan s o unds’ o al ex-
pense a ios (TERs) ac oss 32 coun ies be ween 2002
and 2018. To es his hypo hesis, his wo k u ilizes da a
collec ed om he Reu e s-Lippe pla o m o open-
end ac i e equi y mu ual unds. This pape adds o he
li e a u e by s udying di e en coun ies in an ex en-
si e ime window and by b inging new cha ac e is ics
ha can a ec he ees cha ged by ac i ely managed
equi y unds, such as he unds’ ac i e sha e. In his
sense, his s udy in es iga es whe he he und’s ac i -
i y sha e a ec s i s managemen ees. The a ional in-
ui ion would be ha mo e ac i e unds cha ge mo e
because hey dedica e mo e ime o p ospec ing o new
in es men s. Fu he mo e, he s udy also ies o
L.M. Ca nei o – The de e minan s o mu ual und ees: In e na ional e idence
107
unde s and whe he he unds’ pas pe o mance and
acking e o s impac ees.
The emainde o his pape is s uc u ed as ollows.
Sec ion 2 desc ibes he da a and a iables, while Sec-
ion 3 explains he me hods. Sec ion 4 epo s and dis-
cusses he main empi ical indings. Finally, Sec ion 5
p esen s he main conclusions.
2. Da a and a iables
2.1 Da a
The analysis ca ied ou in his wo k u ilizes he
Reu e s-Lippe da abase, which comp ises a la ge sam-
ple o mu ual unds o e ed in a ious coun ies a ound
he wo ld. This pape ocuses only on open-end ac i ely
managed equi y mu ual unds om 2002 o 2018. Da a
on passi e equi y mu ual unds and ETFs a e used jus
o calcula e he size o he equi y mu ual und indus y
and he und indus y He indahl in each coun y.
The sample includes da a om 32 coun ies in
which he unds a e sold o domiciled. Fo each und
con ained in his sample, he da a con ains a se ies o
in o ma ion, such as (i) name o he und, (ii) coun y
o domicile, (iii) coun y o sale, (i ) benchma k, ( )
asse managemen company, ( i) mon hly ne asse al-
ues, ( ii) mon hly o al ne asse s (TNA), and ( iii) o al
expense a ios (TERs). This s udy also encompasses
da a on he mon hly closing alues o each benchma k
o compu e he alpha gene a ed by each und in each
pe iod.
Fo s a is ical es ing, he sample was sepa a ed ac-
co ding o he coun y o sale o domicile o he und
(Kho ana, Se aes and Tu ano, 2008). The und indus-
y cha ac e is ics o each coun y equi ed us o iden-
i y he na ionali y o he und and he coun ies whe e
he und is a ailable o sale. Thus, he und’s coun y
o domicile indica es whe e he und is legally es ab-
lished, whe eas he coun y o sale ep esen s he places
whe e he und is aded. I he analysis we e es ic ed
o he und's coun y o domicile, we would p esume
ha his und is sold solely in i s home coun y. Since
some unds a e o e ed o sale in se e al coun ies and
ha e mul iple sha e classes, we can ha e se e al obse -
a ions o he same und in a gi en yea when consid-
e ing he sample by coun y o sale. Howe e , o al ex-
pense a ios do no a y o he same und acco ding o
he coun y o sale.
Finally, my sample con ains 20,684 ac i ely man-
aged mu ual unds o e ed o sale o domiciled in 32
di e en coun ies, wi h o al ne asse s summing up
abou US $ 5,1 illion as o Decembe 2018. The sam-
ple comp ises exis ing unds and unds ha ha e al-
eady been liquida ed. In his sense, he da a is ee o
su i al bias. Da a on he g oss domes ic p oduc
(GDP) pe capi a o each coun y was ex ac ed om
he Wo ld Bank da a.
Fig. 1 shows he p og ession o he TNA-weigh ed
TERs o e ime by egion o domicile. I e eals ha in
mos egions such ees do no show g ea a ia ion, ex-
cep in he Uni ed S a es, whe e he educ ion in o al
expense a ios is con inuous, and in B azil and Sou h
A ica, whe e he alls a e also signi ican . No e ha he
da a o Japanese unds we e a ailable in Reu e s-Lip-
pe jus a e 2005.
Figu e 1 TNA-weigh ed TER by yea o ac i e unds om
2002 o 2018 by egion o domicile o unds.
2.2 Va iables
• Fund-le el a iables:
- Fou - ac o alpha is he und annual excess e-
u n calcula ed u ilizing he und’s benchma k-
adjus ed e u ns o e he las 24 mon hs in US
dolla s, ollowing he ecen pe o mance
measu emen li e a u e (C eme s e al., 2016;
Sensoy, 2009). Acco ding o he und geo-
g aphic ocus, his wo k used egional o global
ac o s, ex ac ed om he Fama-F ench (F-F)
ac o da a om he websi e o Kenne h
F ench. Following Angelidis, Giamou idis and
Tessa oma is (2013), his s udy also applied he
benchma k adjus men o he ou - ac o model
o Ca ha (1997), o ge impa ial alphas o
he unds. The model o calcula e he alpha is
desc ibed in Equa ion (1), whe e MKT is he
equi y ma ke e u n o e he isk- ee a e in
US dolla s, meanwhile SMB, HML and MOM
a e size, alue and momen um ac o s.
-
R𝑓,𝑦 − 𝑅𝑏,𝑦 = 𝛼𝑓+ 𝛽1MKT𝑦+ 𝛽2SMB𝑦+
𝛽3HML𝑦+ 𝛽4MOM𝑦+ 𝜖𝑓,𝑦 (1)
108 Ekonomická e ue – Cen al Eu opean Re iew o Economic Issues 25, 2022
- Ac i e sha e is he annual pe cen age o ac i -
i y o a und, measu ed ollowing Amihud and
Goyenko (2013). They in oduced his new
measu e o in es men und ac i i y ha dis in-
guishes he p opo ion o he und e u ns a i-
ance ha is due o non-sys ema ic isk. Since
hen, e u n-based ac i i y measu es ha e been
widely used in he equi y und li e a u e
(He mann, Rohlede and Scholz, 2016; Mülle
and Webe , 2012). So, he und ac i i y is gi en
by 1−R² and he R² is es ima ed using he e-
g essions o de e mine he ou - ac o alpha.
- T acking e o is he annualized s anda d de i-
a ion o he di e ence be ween he e u n o
mu ual und o e benchma k b in mon h m.
- TER is he in es o s’ ees ha con ain he man-
agemen ees, adminis a ion cos s, as well as
main enance, audi ing, and legal expendi u es.
- To al ne asse s ep esen he TNA in US dol-
la s.
- Family o al ne asse s is he TNA o equi y
unds in he same managemen company ex-
cluding he own und’s TNA.
- Age is he numbe o yea s since he und
launch da e.
- Flow is he und’s TNA g ow h in pe cen age,
ne o i s in e nal g ow h.
• Coun y-le el a iables:
- Fund indus y size is he sum o TNA alues in
dolla s o ac i e and passi e unds in he
und’s domicile o coun y o sale.
- Fund indus y He indahl calcula es he con-
cen a ion le el o he und indus y in he
und’s domicile o coun y o sale.
- GDP pe capi a is he g oss domes ic p oduc
pe capi a in US dolla s in he und’s domicile
o coun y o sale.
- In e na ional is a dummy a iable ha akes he
alue 1 i he und is domiciled in a coun y ha
is di e en om i s coun y o sale and he
alue 0 i i is domiciled in he same coun y
whe e his und is a ailable o sale.
2.3 Desc ip i e s a is ics
Table 1 displays he main desc ip i e s a is ics o
he ac i e mu ual unds in he sample o he pe iod be-
ween 2002 and 2018 by coun y o sale (Panel A) and
domicile (Panel B) o he und. This able e eals ha
on a e age he ee o an ac i e und is 1.63% when con-
side ing he sample by coun y o domicile, and 1.74%
when conside ing he sample by coun y o sale.
Fu he mo e, i is possible o e i y ha he a e age and
median o alphas gene a ed by ac i e unds a e nega i e
o ac i e unds in he sample by coun y o sale o
domicile, e en hough he le el o ac i i y o hese
unds has i s a e ages and medians abo e a leas 80%.
The median age o he unds is 8 yea s, while he mean
is abou 10 yea s in bo h samples. The a e age size o
an ac i e und is US$356.64 million in he sample by
coun y o sale and US$337.20 million, conside ing he
sample by coun y o domicile.
Table 1 Desc ip i e s a is ics by coun y o sale and domicile
o unds.
No e This able shows he numbe o obse a ions, he me-
dian, he mean and he s anda d de ia ion o he main a ia-
bles used in he s a is ical es s.
3. Me hods
This pape a emp s o ind he de e mining ac o s
o ac i e unds ees. Equa ion (2) in es iga es he asso-
cia ion be ween ac i e unds’ ees and he 4- ac o al-
pha gene a ed by hem in he p e ious yea (4 .alpha),
hei ac i e sha e (ac i e.sha e), hei acking e o in
he p e ious pe iod ( .e o ). The es s also included
o he unds’ cha ac e is ics ha may a ec ac i e unds
ees ollowing o he s udies in he li e a u e on mu ual
und (Gil-Bazo and Ruiz-Ve dú, 2009; Kho ana,
Se aes and Tu ano, 2008; Wahal and Wang, 2011),
such as o al ne asse s, amily o al ne asse s, age and
lows. The es conside ing sample by coun y o sale
also includes a dummy a iable ha equals 1 i he und
is in e na ional and 0 i i is local. The eg ession also
con ains cha ac e is ics o he coun ies whe e he und
L.M. Ca nei o – The de e minan s o mu ual und ees: In e na ional e idence
109
is domiciled o egis e ed o sale, such as unds indus-
y size, he He indahl index and he GDP pe capi a.
TER𝑓,𝑦 = 𝛽0+ 𝛽14 . alpha𝑓,𝑦−1 + 𝛽2𝑎𝑐𝑡𝑖𝑣𝑒. 𝑠ℎ𝑎𝑟𝑒𝑓,𝑦 +
𝛽3𝑡. 𝑒𝑟𝑟𝑜𝑟
𝑓,𝑦−1 + 𝛽4logTNA𝑓,𝑦 + 𝛽5logFam. TNA𝑓,𝑦 +
𝛽6Age𝑓,𝑦 + 𝛽7Flows𝑓,𝑦 + 𝛽8logInd. size𝑐,𝑦 + 𝛽9logGDP𝑐,𝑦 +
𝛽10He indahl𝑐,𝑦 + 𝛽11In l𝑐,𝑦 + 𝑐+ 𝑦+ 𝑏+ 𝜖𝑓,𝑦
(2)
Go mley and Ma sa (2013) unde sco ed ha he
con ol o unobse ed he e ogenei y is undamen al in
empi ical esea ch in inance, as he in es iga ed a ia-
bles may depend on ac o s ha a e no obse able and,
i hese ac o s a e co ela ed wi h ou a iables o in-
e es , wi hou he p ope ea men , he bias o omi ed
a iables can ha m he es ima ed pa ame e s and p e-
en causal in e ence. In his con ex , he empi ical es s
pe o med he e use coun y ixed e ec s o cap u e un-
obse ed he e ogenei ies ha a e due o cha ac e is ics
o he und’s coun y o sale o domicile (Kho ana,
Se aes and Tu ano, 2008).
Benchma k ixed e ec s we e also included o ge
he e ogenei ies ela ed o he und’s in es men objec-
i es ha can explain ac i e unds ees (Adams, Mansi
and Nishikawa, 2012; C eme s e al., 2016). Besides,
yea - ixed e ec s we e added, seeking o cap u e unob-
se ed abno mali ies ha a y o e ime. Go mley and
Ma sa (2013) also emphasized ha impo an sou ces
o unobse ed he e ogenei y a e common in g oups o
obse a ions and, al hough he es ima es a e consis en ,
he s anda d e o s mus be app op ia ely adjus ed o
conside he educed deg ees o eedom. Thus, acco d-
ing o he au ho s, when es ima ing clus e - obus
s anda d e o s, his adjus men is no necessa y, as i
allows o he e oscedas ici y and in ag oup co ela-
ions. The e o e, he s anda d e o s a e clus e ed by
coun y in he eg essions.
4. Resul s
The e is a lou ishing in e es in he ees cha ged by
mu ual unds. Less compe i i e ma ke s can s imula e
unds managemen companies o cha ge highe ees
(Wahal and Wang, 2011). Kho ana, Se aes and Tu-
ano (2008) a gued ha compe i i e ma ke s lead o
lowe p ices, bu less p o i able ma ke s would a ac
ewe en an s. The compe i ion is endogenous, bu
o he coun y o unds cha ac e is ics may explain he
wide a ia ion in ac i ely managed p oduc s ees
(Kho ana, Se aes and Tu ano, 2008).
In his sec ion, his pape examines he ac o s ha
could a ec ac i e unds ees. Table 2 displays he es-
ima es o my panel da a eg ession, in which he de-
penden a iable is he o al expense a io o an ac i e
und a he end o each yea . The model is he one p e-
sen ed in Equa ion (2). Column 1 conside s he sample
by coun y o sale, whe eas Column 2 p esen s he e-
sul s o he sample by coun y o domicile.
Table 2 De e minan s o he TER o an ac i e und.
TER
TER
By coun y o
sale
By coun y o
domicile
(1)
(2)
4- ac o alpha (lag)
-0.3000***
-0.2000***
(0.0150)
(0.0300)
Ac i e sha e
-0.0580***
-0.0140
(0.0073)
(0.0130)
T acking E o (lag)
0.3800***
0.3100***
(0.0160)
(0.0390)
To al ne asse s (log)
-0.0300***
-0.0420***
(0.0006)
(0.0012)
Family TNA (log)
-0.0180***
-0.0420***
(0.0007)
(0.0012)
Age
0.0055***
0.0082***
(0.0001)
(0.0003)
Flows
-0.000002***
-0.000001***
(0.0000)
(0.0000)
Fund ind. size (log)
0.0460***
-0.0230***
(0.0100)
(0.0110)
GDP pe capi a (log)
0.1500***
0.2900***
(0.0220)
(0.0440)
Fund ind. He indahl
-0.00001***
-0.0001***
(0.00001)
(0.00001)
In e na ional
0.1100***
(0.0033)
Obse a ions
336,031
115,259
𝑅2
0.2200
0.3600
Adjus ed 𝑅2
0.2200
0.3600
No e: This able p o ides esul s o panel eg essions in
which he dependen a iable is he TER o a und a he end
o he yea . All o he eg essions include yea , benchma k
and coun y dummies. Coun y-le el clus e ed obus s and-
a d e o s a e epo ed in pa en heses by coun y o sale (col-
umn 1) o domicile (column 2) o he und. Labels ∗, ∗∗ and
∗ ∗ ∗ deno e s a is ical signi icance a 10%, 5% and 1% le -
els, espec i ely.
This wo k inds e idence ha he alphas gene a ed
in he p io yea nega i ely a ec he o al expense a io
o ac i e equi y unds. This esul is also economically
signi ican : a 1% gain in he alpha gene a ed by ac i e
unds gene a es an app oxima ely 0.30% dec ease in
he ees cha ged, conside ing sample by coun y o sale
o he und, and 0.2% conside ing he sample by

110 Ekonomická e ue – Cen al Eu opean Re iew o Economic Issues 25, 2022
coun y o domicile. Gil-Bazo and Ruiz-Ve dú (2009)
also ound e idence o a nega i e ela ion be ween
unds’ pe o mance and ees. Since hese indings a e
coun e -in ui i e, Gil-Bazo and Ruiz-Ve dú (2009)
p oposed 3 possible easons o his nega i e associa-
ion: (i) unds wi h wo se pas pe o mance e ain in-
es o s ha a e less sensi i e o pe o mance and unds
manage s op imally inc ease ees when con on ed wi h
an inelas ic demand; (ii) unds wi h lowe expec ed pe -
o mance op imally se highe ees and aim in es o s
less sensi i e o pe o mance, while unds wi h be e
pe o mances keep ees low because o compe i ion o
pe o mance-sensi i e in es o s; (iii) unds wi h low
expec ed pe o mance a e ma ke ed o in es o s less
sensi i e o pe o mance and ha e highe dis ibu ion
cos s.
My esul s also indica e ha unds wi h g ea e ac-
i e sha es cha ge lowe ees, conside ing he sample
by coun y o sale o he und. This inding is also in
con lic wi h economic in ui ion. This esul could indi-
ca e ha mo e ac i e unds pe o m be e and keep ees
low because o compe i ion among unds wi h pe o -
mance-sensi i e in es o s. Besides, his inding may
also signal ha in es o s ha e he e ogeneous p e e -
ences o se ices and alue di e en ia ion no ela ed
o he po olio (Ho acsu and Sy e son, 2004).
In u n, he acking e o posi i ely a ec s he o al
expense a io o ac i ely managed equi y unds. C em-
e s and Pe ajis o (2009) unde sco ed ha while s ock-
picking is mo e ela ed o unds’ ac i e sha e, he ack-
ing e o ela es o he sys ema ic ac o be s. In his
sense, my indings may e eal ha unds ha p i ilege
ac o ial be s may cha ge highe ees.
Kho ana, Se aes and Tu ano (2008) epo ed ha
ees a e no mally mo e ele a ed o in e na ional unds
han o unds sold and domiciled in he same coun y.
My indings co obo a e hem, indica ing ha in e na-
ional unds a e associa ed wi h highe ees. In addi ion,
he highe alues o he TERs, as indica ed in he de-
sc ip i e s a is ics, and he inclusion o a dummy o in-
e na ional unds con ibu e o some imes di e gen e-
sul s be ween he samples by coun y o sale and dom-
icile.
The eg essions ou comes o o he unds cha ac e -
is ics a e in line wi h p e ious indings. Equi y mu ual
und o al expense a ios dec ease as he size o hese
unds inc eases, e lec ing he p esence o economies
o scale (El on, G ube and Blake, 2012; Ge anio and
Zano i, 2005; Gil-Bazo and Ruiz-Ve dú, 2009;
Kho ana, Se aes and Tu ano, 2008). My indings also
sugges ed he p esence o economies o scope in he ac-
i e und’s indus y, as he ees a e also smalle as he
size o he unds in he same amily g ows (Ge anio and
Zano i, 2005; Gil-Bazo and Ruiz-Ve dú, 2009;
Kho ana, Se aes and Tu ano, 2008).
Mo eo e , echoing he indings in Kho ana,
Se aes and Tu ano (2008), I ob ained a esul ha does
no i well wi h a ional in ui ion: unds in coun ies
wi h smalle indus ies cha ge lowe ees han hose in
coun ies wi h highe TNA, conside ing he sample o
unds by coun y o domicile. Finally, he esul s indi-
ca e ha inc eases in he age o a und and high le els
o GDP a e associa ed wi h highe ees (C eme s e al.,
2016). Bu , he highe he mu ual und indus y’s con-
cen a ion is he lowe he ac i e unds’ ees.
5. Conclusion
This pape examines he de e mining ac o s o ac-
i e unds ees using da a om 2002 o 2018 o equi y
mu ual unds om 32 coun ies. This s udy inds e i-
dence ha he alphas gene a ed in he p io yea nega-
i ely a ec he ees cha ged by ac i e equi y unds.
My esul s also indica e ha unds wi h g ea e ac i e
sha es cha ge lowe ees. These indings, despi e being
coun e in ui i e, may signal ha in es o s ha e he e o-
geneous p e e ences o se ices, o a demand-side
ma ke segmen a ion among in es o s wi h di e se pe -
o mance sensi i i ies o e en a ce ain i a ionali y o
in es o s.
Fo o he unds cha ac e is ics, he esul s a e in line
wi h p e ious indings. La ge unds ha e lowe o al
expense a ios, indica ing possible economies o scale-
Fu he mo e, ees also diminish as he size o he unds’
asse managemen companies becomes la ge . How-
e e , hese ees ise as he size o he indus y inc eases
and when he unds a e domiciled ab oad.
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