Journal Archive

Home > Journal Archive
Cover Image
  • P-ISSN 2586-2995
  • E-ISSN 2586-4130
Cite

KDI Journal of Economic Policy. Vol. 41, No. 2, May 2019, pp. 59-79

https://doi.org/10.23895/kdijep.2019.41.2.59

× KDI Open Access is a program of fully open access journals to facilitate the widest possible dissemination of high-quality research. All research articles published in KDI JEP are immediately, permanently and freely available online for everyone to read, download and share in terms of the Creative Commons Attribution 4.0 International License.

Sales Compensation and Recommendations as the Fund of the Month

YOONHAE OH

Author & Article History

Manuscript received 09 May 2019; revision received 14 May 2019; accepted 19 June 2019.

Abstract

This study analyzes whether mutual fund distributors are more likely to recommend products with higher sales compensation to maximize their profit. The lists of the ‘fund of the month’ on their webpages are utilized from April of 2015 to August of 2015. A simple comparative analysis shows that the average sales fees and the average front-end load are significantly higher in the recommended funds among the A share class of domestic equity funds. The results of a regression analysis confirm that funds with high sales compensation levels are more likely to be recommended. This holds true for both domestic equity funds and hybrid bond funds even after controlling for fund age, fund size, and past returns.

Keywords

Mutual Fund, Sales Compensation, Conflict of Interest

JEL Code

G20, G24, G28

상단으로 이동

KDIJEP