GIL-BAZO, JAVIER; RUIZ-VERDÚ, PABLO - In: Journal of Finance 64 (2009) 5, pp. 2153-2183
Gruber (1996) drew attention to the puzzle that investors buy actively managed equity mutual funds, even though on average such funds underperform index funds. We uncover another puzzling fact about the market for equity mutual funds: Funds with worse before-fee performance charge higher fees....