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References (2)
-
John Bogle (2005)
The Mutual Fund Industry 60 Years Later: For Better or Worse?Financial Analysts Journal, 61
-
James Ang, Carl Chen, James Lin (1998)
Mutual Fund Managers' Efforts and Performance, 7
- Publisher
- Emerald Publishing
- Copyright
- Copyright © 2007 Emerald Group Publishing Limited. All rights reserved.
- ISSN
- 1935-5181
- DOI
- 10.1108/19355181200700002
- Publisher site
- See Article on Publisher Site
Abstract
Under rule 12b‐1, mutual funds are allowed to charge a fee of up to 100 basis points per year to cover marketing and distribution costs. Under NASD rules, a fund may charge a 12b‐1 fee of up to 25 basis points per year and still advertise itself as a no load fund. This fee is used to make the funds charging it more visible to the investing public. The question explored here is very simple; are the investors in no load funds well served by investing in those funds that charge this fee? It is shown here that the no load funds charging 12b‐1 fees do not perform as well as the funds that do not charge the fee but that they experience greater cash inflows.
Journal
American Journal of Business – Emerald Publishing
Published: Jan 1, 2007
Keywords: Mutual funds; NASD rules; Investors; 12b‐1 fee