... the hypothesis of positive non-expense-ratio economies of scale in passively managed funds using a sample of domestic equity index funds. After removing 621 out of 25,256 fund-months of the most influential observations, we find that scale at the fund and industry levels is positively related to gross benchmark...

... Paper. No. 2016 - 46 . Pástor , L. , R. F. Stambaugh , and L. A. Taylor . 2015 . “ Scale and Skill in Active Management ”. Journal of Financial Economics . 116 (1): 23 – 45 . Diseconomies of scale Mutual fund Liquidity Influential observations Outliers G10 G11...

... that the documented negative relation between scale and return performance in the actively managed mutual fund industry is an artifact of extreme observations. A manual examination of the most influential observations with verifications against outside sources shows that these outliers are largely bad data. Removing...