Abstract
Due to the multiple-class structure of mutual funds, the entry decisions by fund families include two separate decisions: the introduction of new (single-class or multiple-class) portfolios and the introduction of new classes for existing portfolios. The two decisions are based on very different considerations and lead to very different class compositions. New classes in existing portfolios are primarily the results of the expansion of traditional front-end load funds and institutional funds, and are mostly introduced in star portfolios. No-load funds rarely introduce new load classes and no-load classes are never observed to be added to load funds. In addition, fund families starting new multiple-class portfolios appear to follow a very risky introduction strategy.
Published Version
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