Index fund trading costs are inversely related to fund and family size

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dc.contributor.authorAdams, Johnen
dc.contributor.authorHayunga, Darrenen
dc.contributor.authorMansi, Sattar A.en
dc.date.accessioned2023-01-05T18:36:02Zen
dc.date.available2023-01-05T18:36:02Zen
dc.date.issued2022-07en
dc.date.updated2023-01-03T18:57:33Zen
dc.description.abstractTrading costs are a significant, but unobserved, drag on mutual fund performance. Because an index fund does not engage in securities selection or market timing, its trading costs are equivalent to its underperformance relative to its benchmark plus any securities lending in-come it earns. Using a large sample of index funds, we find positive returns to scale at the fund and family levels. We also find greater fund size helps alleviate the higher trading costs associated with illiquid equities and that net trading costs are comparable in magnitude to expense ratios.en
dc.description.versionAccepted versionen
dc.format.mimetypeapplication/pdfen
dc.identifier.doihttps://doi.org/10.1016/j.jbankfin.2022.106527en
dc.identifier.orcidMansi, Sattar [0000-0001-7098-7996]en
dc.identifier.urihttp://hdl.handle.net/10919/113048en
dc.language.isoenen
dc.publisherElsevieren
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.titleIndex fund trading costs are inversely related to fund and family sizeen
dc.title.serialJournal of Banking and Financeen
dc.typeArticle - Refereeden
dc.type.dcmitypeTexten
dc.type.otherArticleen
dcterms.dateAccepted2022-04-25en
pubs.organisational-group/Virginia Techen
pubs.organisational-group/Virginia Tech/Pamplin College of Businessen
pubs.organisational-group/Virginia Tech/Pamplin College of Business/Finance, Insurance, and Business Lawen
pubs.organisational-group/Virginia Tech/All T&R Facultyen
pubs.organisational-group/Virginia Tech/Pamplin College of Business/PCOB T&R Facultyen

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