In: Finance
The studies of mutual fund performance cited in the text found that mutual funds typically had ___.
a. about the same returns before expenses and lower returns than benchmark portfolios after expenses
b. higher returns than the benchmark portfolio after expenses
c. lower returns than the benchmark portfolio before expenses
d. roughly the same returns as the benchmark portfolio after expenses
e. None of the above
INTRODUCTION
MUTUAL FUNDS A mutual fund is a type of professionally managed investment fund that pools money from many investors to purchase securities such as stocks, bonds, money market instruments and other assets. Mutual funds are operated by professional money managers, who allocate the fund's investments and attempt to produce capital gains and/or income for the fund's investors. Some key features of a mutual fund are as follows
We need to check the expense ratio of mutual funds before finalising on a given fund. ... The fund having Sharpe ratio higher than the category average shows that ... the fund manager is able to generate higher returns than the benchmark. ... The portfolio turnover ratio tells you how often the fund manager ...
Conclusion
so answer B is currect that is higher returns than the benchmark portfolio after expenses