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Rating:For Some Bond Funds, AUM Surge Doesn't Translate
to a Fee Drop Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, June 09, 2010

For Some Bond Funds, AUM Surge Doesn't Translate to a Fee Drop

News summary by MFWire's editors

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. 

Edited by: Armie Margaret Lee


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