PT - JOURNAL ARTICLE AU - John A. Haslem TI - Mutual Fund Heterogeneity and Fee Dispersion AID - 10.3905/jwm.2015.18.1.041 DP - 2015 Apr 30 TA - The Journal of Wealth Management PG - 41--48 VI - 18 IP - 1 4099 - https://pm-research.com/content/18/1/41.short 4100 - https://pm-research.com/content/18/1/41.full AB - The purpose of this study is to discuss research that identifies heterogeneous mutual fund and investor attributes and relations that explain dispersion in fund fees. One might think there is a short list of attributes and relations, such as high versus low expense ratios, that tells the full story of fund fee dispersion, but the story is much more extensive and nuanced. The research topics discussed are not inclusive of heterogeneous fund and investor attributes and relations that generate dispersions in fund fees, but they do provide depth within particular research domains.Select findings for discussions of factors influencing dispersion of mutual fund fees include:(1) Fund competition and agency conflicts are important determinants of fund pricing; (2) Fee dispersion primarily arises from heterogeneity of products, clienteles, and production functions; (3) Negative relations between fees and performance is due to strategic fee-setting and investor sensitivity to performance; (4) Investor perceptions of fund markets are key to fund fee-setting mechanisms; (5) Funds segment investors by level of investment sophistication and sell high-cost funds to less-knowledgeable investors; and (6) Fees are lower with small boards, boards with relatively more independent directors, and boards where a higher proportion of directors sit on boards of other sponsor funds.TOPICS: Mutual funds/passive investing/indexing, performance measurement