The Relation between Price and Performance in the Mutual Fund Industry

@inproceedings{GilBazo2009TheRB,
  title={The Relation between Price and Performance in the Mutual Fund Industry},
  author={Javier Gil-Bazo and PABLO RUIZ-VERD{\'U}},
  year={2009}
}
Gruber (1996) drew attention to the puzzle that investors buy actively managed equity mutual funds, even though on average such funds underperform index funds. We uncover another puzzling fact about the market for equity mutual funds: Funds with worse before-fee performance charge higher fees. This negative relation between fees and performance is robust… CONTINUE READING