PT - JOURNAL ARTICLE AU - John A. Haslem AU - H. Kent Baker AU - David M. Smith TI - Institutional S&P 500 Index Mutual Funds as Financial Commodities AID - 10.3905/joi.2008.707215 DP - 2008 May 31 TA - The Journal of Investing PG - 24--34 VI - 17 IP - 2 4099 - https://pm-research.com/content/17/2/24.short 4100 - https://pm-research.com/content/17/2/24.full AB - 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