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1.Chet Currier, 2001, “Be Grateful for the Multitude of Mutual Funds,” Seattle Post-Intelligencer, November 22.
2.John Rea and Brian Reid, 1998, “Trends in the Ownership Cost of Equity Mutual Funds,” Investment Company Institute Perspective, 4(3), pp. 1–16.
3.Frank Stanton, 2000, “Bah! Humbug! Some Funds Hike Fees as They Grow,” Morningstar.com, December 8.
4.Christopher James and Jason Karceski, 2001, “Captured Money? Differences in the Performance Characteristics of Retail and Institutional Mutual Funds,” University of Florida working paper, June.
5.Dan Culloton, 2000, “Scudder Gets Loaded, Kemper Name Axed,” Morningstar.com, October 31.
6.Matthew Morey, 2001, “Should You Carry the Load? A Comprehensive Analysis of the Out-of-Sample Performance of Load and No-Load Mutual Funds,” Journal of Banking and Finance (in press).
7.John Chalmers, Roger Edelen, and Gregory Kadlec, 2000, “Fund Returns and Trading Expenses: Evidence on the Value of Active Fund Management,” Wharton School working paper, September.
8.Marshall Blume, 1993, “Soft Dollars and the Brokerage Industry,” Financial Analysts Journal, March–April, pp. 36–44.
9.“Inspection Report on the Soft Dollar Practices of Broker-Dealers, Investment Advisors and Mutual Funds,” 1998, The Office of Compliance, Inspection and Examinations, U.S. Securities & Exchange Commission, September 22.
10.Nicolaj Siggelkow, 2000, “Expense Shifting: An Empirical Study of Agency Costs in the Mutual Fund Industry,” Wharton School working paper, October.
11.David Harrell, 1998, “Mutual Fund Expense,” Morningstar.com, June 19.
12.Jennifer Conrad, Kevin Johnson, and Sunil Wahal, “Institutional Trading and Soft Dollars,” Journal of Finance, 56(1), pp. 397–416.
13.Nicolaj Siggelkow; see note 10.
14.John McManus, 1990, “Mutual Funds Are Bullish on Ads,” Advertising Age, 61(32), p. 13.
15.Bridget O'Brian, 2000, “The Bad News—And the Good News—for Your Finance—Higher Capital Gains Mean Hefty Tax Bills for Fund Investors,” Wall Street Journal, December 15, p. C1.
16.One might argue that if the two investors must sell their investments at the end of the 10 years, the mutual fund investor will have a higher cost basis and will pay lower taxes. This is true. If the stock investor liquidated the stocks, she would have $515 after taxes. The mutual fund investor would have $476. The difference is smaller than the $96 difference in the illustration. However, this is the worst-case scenario. The stock investor could avoid paying capital gains taxes entirely by donating the stock to charity or bequeathing it in her will.
17.Michael Barclay, Neil Pearson, and Michael Weisbach, 1998, “Open-End Mutual Funds and Capital-Gains Taxes,” Journal of Financial Economics, 49, pp. 3–43.
18.Robert Jeffrey and Robert Arnott, 1993, “Is Your Alpha Big Enough to Cover Its Taxes?” Journal of Portfolio Management, Spring, pp. 15–25.
19.Daniel Bergstresser and James Poterba, 2002, “Do After-Tax Returns Affect Mutual Fund Inflows?” Journal of Financial Economics (in press).
20.William Harding, 2001, “Beware the Tax Man (and Fund Distributions),” Morningstar.com, December 7.
21.Lisa Singhania, 2001, “After-Tax Savings Reporting Detailed,” Associated Press, December; Lewis Braham, 2001, “Funds That Can Dodge Tax Bullets,” Business Week, January 29, p. 78.
22.Gordon Alexander, Jonathan Jones, and Peter Nigro, 1998, “Mutual Fund Shareholders: Characteristics, Investor Knowledge, and Sources of Information,” Financial Services Review, 7(4), pp. 301–316.
23.Noel Capon, Gavan Fitzsimons, and Russ Prince, “An Individual Level Analysis of the Mutual Fund Investment Decision,” Journal of Financial Services Research, 10, pp. 59–82.
24.Brad Barber, Terrance Odean, and Lu Zheng, 2001, “Out of Sight, Out of Mind: The Effects of Expenses on Mutual Fund Flows,” University of California and Davis working paper, June.



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