Are Mutual Fund Investors in Jail?

• Type: Article in International Scientific Journal
• Date: 2007

Authors

Carlos Alves (Author) FEP; Victor Mendes (Author) Other

Journal

Title: Applied Financial Economics

Vol. 17

Pages: 1301-1312

ISSN: 0960-3107

Publisher: Chapman & Hall

Indexing

Scopus - 6 Citations

Econlit

Other information

Authenticus ID: P-007-JR9

Resumo (PT): The absence of investor reaction to the poor performance of mutual funds is a widely reported phenomenon. This paper investigates the role of load costs as an explanation for the phenomenon and concludes that back-end load fees are an obstacle to reaction. We found evidence consistent with the hypothesis that medium and long term investors do not react to poor performances due to the fact that they are “imprisoned” by back-end load fees.

Abstract (EN): The absence of investor reaction to the poor performance of mutual funds is a widely reported phenomenon. This paper investigates the role of load costs as an explanation for the phenomenon and concludes that back-end load fees are an obstacle to reaction. We found evidence consistent with the hypothesis that medium and long term investors do not react to poor performances due to the fact that they are “imprisoned” by back-end load fees.

Language: Portuguese

Type (Professor's evaluation): Scientific