Journal of Financial Economics Vol. 148 No. 1 2023

The Modern Mutual Fund Family

Caitlin D. Dannhauser^1,2; Harold D. Spilker^1,2

¹ University of Hawaiʻi at Mānoa · ² Villanova University

Abstract

Modern mutual fund families include more than active mutual funds (AMFs). AMFs in families with greater index mutual fund (IMF) presence generate higher category-adjusted gross returns. Performance is positively related to the levels of passive and active fees, suggesting moral hazard. Intrafamily competition from IMFs in the same Morningstar category incentivizes managers to exert effort. Financial resources do not contribute to the performance effect. Cross-trading with IMFs occurs with some positive effect on performance. ETFs have no impact on performance. IMFs reduce flow-performance sensitivity and flow volatility of AMFs in the family. IMFs and ETFs uniquely contribute to expense pressure.

DOI

10.1016/j.jfineco.2023.02.001

Volume

148

Issue

1

Pages

1-20

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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