Mutual fund distribution fees: An empirical analysis of the impact of deregulation

Journal of Financial Services Research - Tập 5 - Trang 25-42 - 1991
Don M. Chance1, Stephen P. Ferris2,3,4
1Virginia Polytechnic Institute and State University, Blacksburg, U.S.A.
2Visiting Associate Professor of Business Administration, University of Pittsburgh, Blacksburg, U.S.A.
3Associate Professor of Finance, Virginia Polytechnic Institite and State University, Blacksburg, U.S.A.
4Department of Finance, The R.B. Pamplin College of Business, Virginia Polytechnic Institute and State University, Blacksburg, U.S.A.

Tóm tắt

The Securities and Exchange Commission's Rule 12b-1 ended a 40-year prohibition on the payment of distribution fees by mutual funds. The fees have the potential to create conflicts between fund managers and shareholders. This study examines the characteristics of funds implementing the plans, and assesses costs and benefits. Findings reveal that there is a growing tendency of funds, particularly load funds, to adopt the plans. The costs have begun to increase dramatically in recent years though some load funds with plans have begun reducing their loads. However, 12b-1 plans do not seem to contribute to the expense ratios of funds oriented toward capital gains. The plans offer the intangible benefit of spreading load charges across time, thus increasing a fund's attractiveness to a broader range of investors.

Tài liệu tham khảo

Burgunder, Lee B., and Hartmann, Karl O. “The Mutual Fund Industry and Rule 12b-1 Plans: An Assessment.” Securities Regulation Law Journal (Winter 1988), 364–420.

Ferris, Stephen P., and Chance, Don M. “The Effect of 12b-1 Plans on Mutual Fund Expense Ratios: A Note.” Journal of Finance 42 (September 1987), 1077–1082.

Investment Company Act of 1940. Various releases.

Investment Company Institute. “Statement of the Investment Company Institute Regarding the Operation of Rule 12b-1 Plans” (August 8, 1986).

Investment Company Institute. 1987 Mutual Fund Fact Book. Washington, DC: Investment Company Institute, 1987.

Investment Company Institute. “Comments of the Investment Company Institute on Amendments to Rule 12b-1 Proposed by Investment Company Act Release No. 16431 (September 19, 1988).

Rabon, Kathy, and Driessen, Robert. SEC Internal Memorandum to Gene Gohlke (August 14, 1986).

Roll, Richard. “Ambiguity When Performance is Measured by the Security Market Line.” Journal of Finance (September 1978), 1051–1069.

Simon, Ruth. “The Long Trail.” Forbes (September 21, 1987), 204.

Wong, Jan. “Conventional Wisdom Holds that Small Mutual Funds Outperform Big Ones: Much of the Evidence of Late, However, Shows Otherwise.” Wall Street Journal (June 5, 1986), 29.

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Thông tin xuất bản

Journal of Financial Services Research

Tập 5

25-42

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