Fee structure and mutual fund choice: An experiment

Anufriev, M; Bao, T; Sutan, A; Tuinstra, J

Fee structure and mutual fund choice: An experiment

Anufriev, M

Bao, T Sutan, A Tuinstra, J

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Publication Type:: Journal Article
Citation:: Journal of Economic Behavior and Organization, 2019, 158 pp. 449 - 474
Issue Date:: 2019-02-01

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Field	Value	Language
dc.contributor.author	Anufriev, M https://orcid.org/0000-0002-1842-6814	en_US
dc.contributor.author	Bao, T	en_US
dc.contributor.author	Sutan, A	en_US
dc.contributor.author	Tuinstra, J	en_US
dc.date.available	2018-12-15	en_US
dc.date.issued	2019-02-01	en_US
dc.identifier.citation	Journal of Economic Behavior and Organization, 2019, 158 pp. 449 - 474	en_US
dc.identifier.issn	0167-2681	en_US
dc.identifier.uri	http://hdl.handle.net/10453/136073
dc.description.abstract	© 2018 Elsevier B.V. We present a laboratory experiment designed to investigate the effect of the fee structure on mutual fund choice. We find that subjects tend to ignore periodic and small operating expenses fees and base their decisions on gross, instead of net, returns. A fee in the form of a, much larger, front-end load leads to lock-in into one of the funds. It is used by some subjects as a commitment device, but exacerbates the decision errors of other subjects. Although past returns do not convey information about future returns, return chasing helps explain subjects’ behavior.	en_US
dc.relation	http://purl.org/au-research/grants/arc/DP140103501
dc.relation.ispartof	Journal of Economic Behavior and Organization	en_US
dc.relation.isbasedon	10.1016/j.jebo.2018.12.013	en_US
dc.rights	info:eu-repo/semantics/embargoedAccess
dc.subject.classification	Economics	en_US
dc.title	Fee structure and mutual fund choice: An experiment	en_US
dc.type	Journal Article
utslib.citation.volume	158	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1403 Econometrics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	open_access	*
utslib.copyright.embargo	2022-01-12T00:00:00+1100
pubs.publication-status	Published	en_US
pubs.volume	158	en_US

Abstract:

© 2018 Elsevier B.V. We present a laboratory experiment designed to investigate the effect of the fee structure on mutual fund choice. We find that subjects tend to ignore periodic and small operating expenses fees and base their decisions on gross, instead of net, returns. A fee in the form of a, much larger, front-end load leads to lock-in into one of the funds. It is used by some subjects as a commitment device, but exacerbates the decision errors of other subjects. Although past returns do not convey information about future returns, return chasing helps explain subjects’ behavior.

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http://hdl.handle.net/10453/136073