%0 Journal Article %A John A. Haslem %A H. Kent Baker %A David M. Smith %T Institutional S&P 500 Index Mutual Funds as Financial Commodities %B Fact or Fiction? %D 2008 %R 10.3905/joi.2008.707215 %J The Journal of Investing %P 24-34 %V 17 %N 2 %X Given their simplicity and presumed commodity-like nature, institutional S&P 500 Index mutual funds should be subject to active price competition, resulting in only nominal size-adjusted differences in expenses. This article finds a wide disparity among fund expense ratios and their corresponding characteristics and performance. Overall, the evidence suggests some price competition among institutional S&P 500 funds, but not to the extent that they may be considered financial commodities. One explanation for the existence of high-priced index funds is that they tend to require significantly lower minimum initial purchases. The data do not support the notion that institutional investors buy high-priced S&P 500 funds to access broader or lower-cost investment services from fund families, and the conclusion is that the market for institutional S&P 500 funds is not completely homogenous.TOPICS: Security analysis and valuation, performance measurement, technical analysis %U https://joi.pm-research.com/content/iijinvest/17/2/24.full.pdf