Mutual Funds’ Soft Dollar Arrangements: Determinants, Impact on Shareholder Wealth, and Relation to Governance

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• 作者：Yaman Ö. Erzurumlu ; Vladimir Kotomin
• 刊名：Journal of Financial Services Research
• 出版年：2016
• 出版时间：August 2016
• 年：2016
• 卷：50
• 期：1
• 页码：95-119
• 全文大小：346 KB
• 刊物类别：Business and Economics
• 刊物主题：Economics
  Finance and Banking
  Macroeconomics and Monetary Economics
  
• 出版者：Springer Netherlands
• ISSN：1573-0735
• 卷排序：50

文摘

Mutual fund advisers either expense the cost of research and other services or pay for them with soft dollars. This study is the first to use actual soft dollar and total brokerage commission figures for a large number of funds and to examine how soft dollars are linked to mutual fund governance. Employing a survivorship bias-free sample of actively managed US mutual funds, we find that higher soft dollar and total brokerage commissions are associated with higher advisory fees but not with higher risk-adjusted fund returns. These findings suggest that mutual fund shareholders, on average, do not benefit from the research and the information supplied by third parties such as brokers. We also find that larger and more highly compensated boards are associated with lower advisory fees. Larger boards are also associated with slightly lower turnover. The median tenure of board directors is negatively correlated with soft dollar commissions and turnover, but not correlated with total brokerage commissions or the cost of turning over a portfolio. Higher proportions of directors with a finance background are associated with higher advisory fees, brokerage commissions, and turnover costs. These associations might indicate greater agency costs.KeywordsMutual fundsSoft dollarsMutual fund feesMutual fund performanceMutual fund governance