TY - JOUR
AU1 - Wermers, Russ
AB - We use a new database to perform a comprehensive analysis of the mutual fund industry. We find that funds hold stocks that outperform the market by 1.3 percent per year, but their net returns underperform by one percent. Of the 2.3 percent difference between these results, 0.7 percent is due to the underperformance of nonstock holdings, whereas 1.6 percent is due to expenses and transactions costs. Thus, funds pick stocks well enough to cover their costs. Also, high‐turnover funds beat the Vanguard Index 500 fund on a net return basis. Our evidence supports the value of active mutual fund management.
TI - Mutual Fund Performance: An Empirical Decomposition into Stock‐Picking Talent, Style, Transactions Costs, and Expenses
JF - The Journal of Finance
DO - 10.1111/0022-1082.00263
DA - 2000-08-01
UR - https://www.deepdyve.com/lp/wiley/mutual-fund-performance-an-empirical-decomposition-into-stock-picking-sxm14rfzQX
SP - 1655
EP - 1695
VL - 55
IS - 4
DP - DeepDyve
ER -