Cross-Fund Subsidization Behavior in Mutual Fund Families

We investigate whether mutual fund families transfer performance across member funds to favor those more likely to increase overall family profits based on fund characteristic of fees, performance and age. We find that the cross-fund subsidization behavior is most significant between old and young funds. In the way of performance, mutual fund families have the incline to subsidize the low performance fund in our domestic market. The way of fees is insignificant.