For every dollar mutual funds spend on trading costs, there is a 42 cent reduction in fund value, InvestmentNews Investment News quoted Virginia Tech professor Gregory Kadlec as saying at last week's Morningstar conference. "On average funds recover half their trading costs, but the other half is a drag on fund performance,” said Kadlec. Trades that are particularly costly according to Kadlec are flow-induced trades and soft-dollar linked trades.  

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