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RESEARCH PAPER
Cost of Active Management in Polish Investment Funds
 
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Department of Banking, Wrocław University of Economics and Business, Poland
CORRESPONDING AUTHOR
Artur Trzebiński   

Department of Banking, Wrocław University of Economics and Business, Poland
Submission date: 2021-09-02
Final revision date: 2022-01-12
Acceptance date: 2022-07-01
Publication date: 2022-09-30
 
GNPJE 2022;311(3):93–102
 
KEYWORDS
JEL CLASSIFICATION CODES
G11
G23
 
ABSTRACT
The article presents a study on the costs of active management based on five different measures: the active expense ratio, the active fee, the new active fee, the active to passive fee, and the maximum acceptable fee (MAF) ratio. There are two main objectives of the article. The first one is to indicate which measure is best in estimating the costs of active management. The second one is to check whether the costs incurred are related to the value added for investors. In the study, 34 Polish equity mutual funds are evaluated. Based on the obtained results, it can be concluded that two measures, the active to passive ratio and the MAF ratio, provide the most practical information. What’s more, active management does not generate any excess returns. On the contrary, a reduction can be observed.
 
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