Competition among mutual funds

• 成果类型: Article
• 署名作者: Wahal, Sunil; Wang, Albert (Yan)
• 署名单位: Arizona State University; Arizona State University-Tempe; Chinese University of Hong Kong
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.08.012
• 发表日期: 2011
• 页码: 40-59
• 关键词: mutual funds; Competitive market; INCUMBENTS

摘要

We examine the impact of the entry of new mutual funds on incumbents using the overlap in their portfolio holdings as a measure of competitive intensity. This simple metric delivers powerful economic results. Incumbents that have a high overlap with entrants subsequently engage in price competition by reducing management fees. Distribution fees, however, rise so that investors do not benefit as much from price competition. Funds with high overlap also experience quantity competition through lower investor flows, have lower alphas, and higher attrition rates. These effects only appear after the late 1990s, at which point there appears to be an endogenous structural shift in the competitive environment. We conclude that the mutual fund market has evolved into one that displays the hallmark features of a competitive market. (C) 2010 Elsevier B.V. All rights reserved.