PT  - JOURNAL ARTICLE
AU  - William R Reichenstein
TI  - Bond Fund Returns and Expenses
AID  - 10.3905/joi.1999.319426
DP  - 1999 Nov 30
TA  - The Journal of Investing
PG  - 8--16
VI  - 8
IP  - 4
4099  - https://pm-research.com/content/8/4/8.short
4100  - https://pm-research.com/content/8/4/8.full
AB  - This study examines the relationship between expenses and net return among bond funds with similar style - that is, duration and quality. It concludes that there is a strong, negative relation between funds' expense ratios and net return. Most evidence implies that fund expenses, whether in the form of an annual expense ratio or a one-time sales load, are deadweight losses to the investor. The evidence suggests that the lowest-cost bond fund within a sample of similar-style funds will consistently produce top quartile net returns over five-year and longer horizons. Low costs do not produce a persistent net return advantage over shorter horizons, however.