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Despite claims by some mutual fund salespeople that high expenses somehow equate with superior performance, data from TheStreet.com Ratings indicate that those who penny-pinch can do quite well in risk-adjusted returns.

TheStreet.com Ratings’ database of open-end stock funds was screened to filter out new and unstable funds with less than $1 million in total net assets. We also included retail funds with initial investment requirements of no more than $50,000.

The 10,555 remaining funds were then reviewed to see how expense ratios and asset size affect our ratings grades, which are based on risk-adjusted returns. (All portfolio classes were counted as individual funds in the study.)

In most cases, the difference between a relatively high and low expense ratio amounts to a fraction of one percentage point. However, this could translate into a material difference over years of compounding.

TheStreet.com Ratings’ grades consider only returns and volatility for the past three years, with extra weight given to the most recent performance periods. Even without allowing the fractionally lower expense burdens much time to build, the low-expense-ratio funds earned impressive grades compared with their pricier counterparts.

The bar chart below is based on funds with high vs. low expense ratios. It shows that in the C range of grades, which equate to hold recommendations, fund expenses didn’t make a material difference among the grades.

But in the buy-recommended A and B grade ranges, there was a higher percentage of funds with low expense ratios — except for the top grade of A-plus, in which there is actually a slightly higher percentage of high-fee funds. Similarly, there was a smaller percentage of low-expense funds languishing in the sell-recommended D and E grade ranges.

Of the 10% of funds with the lowest expense ratios, only 26.4% fell into the sell-recommended category, while 25.6% of the top 10% of funds found themselves similarly classified. But 31.3% of the decile with the highest expense ratio were tagged with sell recommendations by TheStreet.com Ratings, where they were kept company by 32.3% of the smallest TNA (total net assets) decile.

TheStreet.com Ratings’ Grades for Highest and Lowest Expense Ratio Stock Funds

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We also found that the larger funds, in terms of asset size, did not saddle their holders with the higher expense percentages imposed by small funds, reflecting the smaller asset bases over which they have to spread their costs. The average expense ratio of the top 10% of funds, as ranked by total net assets, was 1% vs. 1.61% for the lowest 10%. That translated into a significant advantage in our ratings grades earned by the big boys.

TheStreet.com Ratings’ Grades for Stock Funds by Asset Size

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Sampdoria striker Fabio Quagliarella has admitted he could be tempted by a move to Manchester United this summer. United reportedly made a 10m offer last month to sign the Italy international and, according to Quagliarella, they have now increased that amount in the hope of beating off a host of Serie A rivals for his signature.

When asked about United’s offer, Quagliarella replied: “It seems a serious offer, they have raised it and it is an important figure. Manchester United are a big deal and if it ended up going that way, I would gladly join the Premier League. It is a fascinating and beautiful competition.”

Quagliarella joined Sampdoria last summer from Ascoli, although his sporting rights are co-owned by both the Genoa club and Udinese. He made 35 league appearances last season, scoring 13 goals, and his performances earned him a call-up to the national team, where earlier this month he scored his first two goals for the Azzurri during Italy’s 2-0 Euro 2008 qualifying win against Lithuania.

However, Quagliarella, who is under contract with the club until 2010, did admit he would be equally content to continue his career in Serie A, saying: “I am really happy at Sampdoria. I would prefer to remain in Italy, having continuity and having the trust of [national team coach Roberto] Donadoni.”

Czech Republic striker Jan Koller insists he is happy at Monaco and has heard nothing about a possible move to Reading, in the wake of newspaper reports linking him with a switch to the Madejski Stadium.

“I have not heard anything,” declared the 34-year-old. “There is no point in talking about it, I have a contract with Monaco and I am happy there. We have a new coach [Ricardo Gomes], I do not know what he will be like, but I will start summer training with maximum effort and I want to see out my contract.”

Leicester have continued their summer recruitment drive with the signing of Bulgaria international midfielder Radostin Kishishev from Charlton on a two-year deal. The 32-year-old, who impressed during a loan spell with Leeds at the end of last season, becomes the sixth new arrival under Foxes boss Martin Allen.

“He has had other clubs after him so it has been a bit of a nervy wait but I’m delighted that he has agreed to come here,” said Allen. “He is down to earth and he is not big time. He is a solid citizen and he will be good for this club. He gives us some steel in the centre of midfield and knows what the game is about.”

The 113-year-old Winnipeg Commodity Exchange Canada’s only commodity futures market said Friday it has struck a deal to be bought for $40 million by Atlanta-based IntercontinentalExchange Inc.

WCE Holdings Inc., the parent of Winnipeg Commodity Exchange, WCE Clearing Corporation and Canadian Climate Exchange Inc., said it has agreed to a takeover offer of$62.08 per common share.

Lorne DeJaeger, the chairman of WCE Holdings Inc., said the WCE and the climate exchange will continue to operate in Winnipeg.

Established in 1887, the WCE has been doing futures contract trading since 1904. The exchange was also the first North American commodity exchange to shift to all-electronic trading when it shut down its “open outcry” system in December 2004.

The exchange has trading futures and options contracts on canola, domestic feed wheat and western barley.

IntercontinentalExchange operates electronic trading markets for energy and other commodities. The company is currently in a bidding fight with the Chicago Mercantile Exchange Holdings Inc. to acquire the Chicago Board of Trade. In January, ICE bought the New York Board of Trade.

LONDON: Royal Bank of Scotland, the British bank, and two other European lenders offered \72.2 billion for ABN AMRO on Wednesday, sparking the biggest-ever takeover battle in the banking industry.

RBS, together with Banco Santander Central Hispano, Spains largest bank, and Fortis, a Belgian banking group, offered \39, or $52.98, a share in stock and cash for ABN, the largest Dutch bank.

The offer, 70 percent in cash and the rest in stock, is worth a total of $98.5 billion; it trumps the \36.25-a-share, all-share offer Barclays made Monday by about 13 percent.

“The banks believe that the potential transaction will create stronger businesses with enhanced market positions,” the RBS consortium said in a statement announcing the new offer, “and growth prospects in each of ABN AMROs main markets.”

“The banks believe that execution risk would be lower than in a transaction with Barclays,” the statement said.

The proposal also includes ABNs final 2006 dividend of 60 euro cents a share.

The bid is contingent on ABN keeping LaSalle Bank, its U.S. subsidiary, which RBS has identified as one of the Dutch banks most attractive assets. It is also subject to ABN opening up its books in full for inspection by the bidding group.

ABN said Monday that it had agreed to sell LaSalle to Bank of America, in what was widely seen as a move by ABNs board to torpedo an RBS counterbid. The deal reportedly angered RBS and some dissident ABN shareholders.

A successful acquisition by the RBS group would likely lead to a breakup of the ABN banking conglomerate, allowing the most valuable portions to be distributed among the consortium partners. ABNs board has repeatedly made clear that it opposes such a move.

Rijkman Groenink, the Dutch banks chief executive, has also said that he prefers a combination with Barclays, which would create one of the biggest global banks, rather than any deal that would divide the lender into pieces.

Analysts have argued that the opposition to splitting up ABN means that the takeover will not be decided on price.

Groenink said Monday that the Barclays option offered the best possible long-term value for shareholders.

Nonetheless, shareholders may still opt for the higher takeover offer, analysts said. The Childrens Investment Fund, an activist hedge fund with a stake in ABN whose pressure on the banks management to focus on shareholder value triggered the takeover talks with Barclays earlier this year, said on Wednesday that the RBS groups offer was “compelling.”

The London-based fund, which owns less than 3 percent of ABN, also called on the Dutch lender to allow the RBS group full access to the financial information it has given Barclays. The fund also wants the ABN board to recommend the RBS offer and terminate the sale of LaSalle.

LONDON (AFX) - Here are the top stories on AFX News

Deutsche Boerse Feb Xetra/Trading Floor revenues up 58 pct at 206.1 bln eur

FRANKFURT (AFX) - Deutsche Boerse AG said combined turnover in February on its Xetra exchange and its trading floor was 206.1 bln eur, representing a rise of 58 percent year-on-year.

Xetra trading revenues grew 64 pct to 190.7 bln eur, with 15.5 bln eur of floor trades.

Belgacom FY net rises to forecast-beating 973 mln eur vs 959 mln

BRUSSELS (AFX) - Belgian telecommunications group Belgacom SA posted a forecast-beating full-year net profit of 973 mln eur compared with 959 mln a year earlier as sales climbed to 6.1 bln eur from 5.7 bln.

EBITDA was in line with market expectations, easing to 2.149 bln eur from 2.214 bln.

Adecco Q4 net beats forecasts boosted by tax benefit; confirms target, hikes div

ZURICH (AFX) - Adecco SA reported a forecast-beating fourth quarter net profit of 212 mln eur, up 23 pct year-on-year, boosted by a tax benefit in the US, with the temporary employment group also confirming its long-term goals and hiking its dividend.

Analysts polled by AFX News forecast net profit to reach 148.9-156.0 mln eur, or an average of 151.3 mln.

Mediaset FY net slips to 505 mln eur vs 603, div 0.43 per share, unchanged

MILAN (AFX) - Mediaset SpA said its full-year net profit fell to a preliminary 505.0 mln eur from 603.4 mln a year earlier due to weak advertising revenues in Italy.

Nevertheless, the company said it will maintain its dividend at 0.43 eur per share.

Natixis to join CAC Next20 index; Pages Jaunes removed

PARIS (AFX) - Newly-formed bank Natixis will join the CAC Next20 index on March 19, when PagesJaunes will drop out, Euronext Paris announced.

EDF Energies Nouvelles will be added to the SBF 250 index, it said.

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