Starting today we are going to post our daily screencast to the Abnormal Returns Classic blog.    First that gives our readers easy access to this new(ish) feature.  Second it allows us to provide the links to the items we discuss in the screencast.  For those interested we are using he Screenr functionality at which recommend highly.

In today’s screencast we discuss the irreducible math of mutual fund fees.  A recent Morningstar study shows that mutual fund fees are a nearly infallible predictor of future fund performance.  To quote Russel Kinnel at Morningstar:

Expense ratios are strong predictors of performance. In every asset class over every time period, the cheapest quintile produced higher total returns than the most expensive quintile.

In short, high fees lead to lower returns.  We discuss why this might be the case.

How expenses and stars predict success.  (Morningstar)

How expenses and stars predict success – data table.  (Morningstar)

Low fees outshine the star system.  (WSJ)

Luck versus skill in the cross-section of mutual fund returns.  (SSRN)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.

Please see the Terms & Conditions page for a full disclaimer.