In Wednesday's Wall Street Journal Fund Track column
Sam Mamudi takes a look at whether the biggest bond funds
are lowering expense ratios.
The picture that emerged is mixed. Citing data from
Standard & Poor's Equity Research, Mamudi reports that
some of the funds that saw the biggest flows -- Pimco Total Return, Dodge & Cox Income and Franklin Global Bond -- did not lower their net expense ratio.
Among the biggest corporate investment-grade bond funds,
MFS Research Bond Fund T. Rowe Price New Income
both upped their expense ratios. An MFS spokesperson tells
Mamudi that "the effective management fee went up because there had been a fee waiver in effect on the earlier date." In the case of T. Rowe, a spokesman attributed the increase to a rise in servicing costs.
Other funds that saw both AUM and expense ratios rise include Pioneer High Yield Fund and Putnam Diversfied
Income. Reps for the two firms note that average net assets fell from 2008 to 2009, thus resulting in the
fee hike. On the part of Pioneer, a spokesperson also points out that the additional cost of dealing with smaller accounts partly drove the increase.
Meanwhile, the article also mentions those that lowered fees amid a surge in assets.
The list includes American Century Diversified Bond and Lord Abbett Short Duration Income.
Armie Margaret Lee
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