The Expenses of Real Estate Funds in a Small Market: Their Determinants

Alves, Paulo (2016): The Expenses of Real Estate Funds in a Small Market: Their Determinants. Published in: Investment Management and Financial Innovations (2015)

Abstract

This paper analyses the determinants of expenses for Portuguese real estate funds from 2007 to 2012 and is a pioneer study on the determinants of expenses concerning real estate funds. Closed-end and open-end real estate funds benefit from economies of scale. However, the most important result of this study concerns the fiscal policy implemented by the Portuguese authorities during the 1980s. Closed-end funds flourished by capturing tax benefits, even in the event that risk was not rewarded by return. Investors created financial instruments in which to allocate their real assets, instead of holding them individually.

• Item Type: MPRA Paper
• Language: English
• Keywords: Expenses; Real estate funds; Closed-end funds
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors

References

Alves, P., 2015,The fees of mutual funds and real estate funds. Their determinants in a small market, Journal of Advanced Studies in Finance, (Volume VI, Summer), 1(11), 21-29.

Berkowitz, M., Kotowitz, Y., 2002. Managerial Quality and the Structure of Management Expenses in The US Mutual Fund Industry. International Review of Economics and Finance, 11, 315-330.

Chance, M., Ferris, S, 1991. Mutual Fund Distribution Fees: An Empirical Analysis of the Impact of Deregulation. Journal of Financial Services Research, 45, 24-42.

Dellva, W., Olson, G., 1998. The Relationship Between Mutual Fund Fees and Expenses and Their Effects on Performance. Financial Review, 33, 85-104.

Fama, E., MacBeth, J., 1973, Risk, Return, and Equilibrium: Empirical Tests, Journal of Political Economy, 81, 607–636.

Ferris. S., Chance, M., 1987. “The effect of 12b-1 Plans on Mutual Fund Expense Ratios: A Note. Journal of Finance, 42, 1077-1082.

Frye, M., 2001. The Performance of Bank-Managed Mutual Funds. Journal of Financial Research, 24, 419-442.

Gao, X., e Livingston, M., 2008. The Components of Mutual Fund Fees, Financial Markets, Institutions & Instruments, 17, 197-223.

Gil-Bazo, J., Martinez, M., 2004. The Black Box of Mutual Fund Fees. Spanish Review of Financial Economics, 4, 54-82.

Golec. J., 2003. Regulation and the Rise in Asset-Based Mutual fund Management Fees. Journal of Financial Research, 1, 19-30.

Haslem, J., Baker, H., Smith, D., 2008. Performance and Characteristics of Actively Managed Retail Equity Mutual Funds with Diverse Expense ratios. Financial Services Review, 17, 49-68.

Korkeamaki, T., Smythe, T., 2004. Effects of Market Segmentation and Bank Concentration on Mutual Fund Expenses and Returns: Evidence from Finland. European Financial Management, 10, 413-438.

Korpela, M., Puttonen, V., 2006. Mutual Fund Expenses: Evidence on the Effect of Distribution Channels. Journal of Financial Services Marketing, 11, 17-29.

LaPlante, M., 2001. Influences and Trends in Mutual Fund Expense Ratios. Journal of Financial Research, 24, 45-63.

Latzko, D., 1999. Economies of Scale in Mutual Fund Administration. Journal of Financial Research, 22, 331-339.

Latzko, D., 2003. Mutual Fund Expenses: An Econometric Investigation. Working Paper, Pennsylvania State University, York Campus.

Lesseig, V., Long, M., Smythe, T., 2002, Gains to Mutual Fund Sponsors Offering Multiple Share Class Funds. Journal of Financial Research, 25, 81-98.

Luo, G., 2002. Mutual Fund Fee-setting. Market Structure and Mark-ups. Economica, 69, 245-271.

Malhotra, D., McLeod, R., 1997. An empirical Analysis of Mutual Fund Expenses. Journal of Financial Research, 20, 175-190.

Martin, R., Malhotra, D., McLeod, R., 2001. A Comparative Analysis of the Expense Ratios of Domestic and International Open-End and Closed-End Equity Funds. Financial Counseling and Planning, 12, 61-73.

Newey, W., West, K., 1987. A Simple, Positive Semi-Definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix. Econometrica, 55, 703-708.

Otten, R., Bams, D., 2002. European Mutual Fund Performance. European Financial Management, 8, 75-101.

Tufano, P., Sevick, M., 1997. Board Structure and Fee-setting in The US Mutual Fund Industry. Journal of Financial Economics, 53, 1589-1622.

Wermers. R., 2000. Mutual Fund Performance: An Empirical Decomposition into Stock-Picking Talent. Style, Transaction Costs, and Expenses. Journal of Finance, 55, 1655–1695.