Marketing Mutual Funds

• 成果类型: Article
• 署名作者: Roussanov, Nikolai; Ruan, Hongxun; Wei, Yanhao
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; Peking University; University of Southern California
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa095
• 发表日期: 2021
• 页码: 3045
• 关键词: PRESIDENTIAL-ADDRESS; performance; price; size; COMPETITION; BROKERS; search; GROWTH; COSTS; FLOWS

摘要

Marketing and distribution expenses are responsible for about one-third of the cost of active management in the mutual fund industry. Estimating a structural model with costly investor search and learning about fund skill, we find that marketing is nearly as important as performance and fees in determining fund size. Eliminating marketing substantially improves welfare: capital shifts toward cheaper funds and competition decreases fees; active funds shrink and capital allocation becomes more closely aligned with skill. Declining investor search costs imply a reduction in marketing expenses and management fees as well as a shift toward passive investing, as observed empirically.