Are higher fees justified by superior performance ? Evidence from Belgian mutual funds
Promotor(s) : Bazgour, Tarik
Date of defense : 23-Jun-2016/28-Jun-2016 • Permalink :
|Title :||Are higher fees justified by superior performance ? Evidence from Belgian mutual funds|
|Author :||Veithen, Joan|
|Date of defense :||23-Jun-2016/28-Jun-2016|
|Advisor(s) :||Bazgour, Tarik|
|Committee's member(s) :||Berners, David
|Discipline(s) :||Business & economic sciences > Finance|
|Institution(s) :||Université de Liège, Liège, Belgique|
|Degree:||Master en sciences de gestion, à finalité spécialisée en Banking and Asset Management|
|Faculty:||Master thesis of the HEC-Ecole de gestion de l'ULg|
[en] In this study, I use a data sample consisting of open-end equity mutual funds from the Belgian mutual fund market over the period 2005-2015. Previous literature found mainly that fund performance is negatively related to the expense ratio and positively related to total fund assets. My findings confirm that there is a statistically significant negative relationship between performance and expenses, indicating inefficient use of resources. In addition, I determine a significant positive relation between performance and total assets. This results suggests economies of scales in larger funds. Furthermore, I find that mutual funds generally underperform the market. Moreover, I do not find any correlation between age, front loads, rear loads and performance. In conclusion, investors are better off buying funds with lower expense ratios.
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