Investors are preoccupied with sales fees, when they should really be looking at funds' operating expenses - the net result of which has been the mutual fund industry's preoccupation with no-load funds. That's the conclusion of a report by a team from the University of Michigan and the University of California at the Berkeley and Davis campuses.
"Purchase decisions of mutual fund investors are influenced by attention-grabbing information," said Lu Zheng, assistant professor of finance at the University of Michigan business school.
The study's results support the General Accounting Office's recommendation that one step in educating the public about fund expenses would be for funds to disclose the actual dollar amount of fees investors pay, Zheng said.
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