Exchange-traded funds (ETFs) have become in their 25-year history one of the fastest growing segments of the investment management business. These funds provide liquid access to virtually every financial market and allow large and small investors to build institutional-caliber portfolios. Yet,...

The asset management industry widely assumes that asset growth in a fund automatically follows superior performance. In this paper, we illustrate that while there is truth to this, it is not as straight forward as many would imagine. Performance is important, but is not sufficient to guarantee...

With an ever-increasing amount of information related to the stock market or various investment avenues, misperception or no perception regarding mutual funds is becoming a norm for investors and marketers. To date no perception measuring scale has been developed for mutual fund investors, to...

Fund managers are paid a fixed management fee in proportion to their assets under management. This means to maximize revenue, managers hoard assets. Whilst this results in increased revenue for the manager often, due to diseconomies of scale, it results in lower returns for the investor. Here we...

This is the first study of corporate-bond mutual fund performance that examines detailed security-level holdings and returns. The new database allows us to decompose the costs and benefits of active management. In contrast to prior research on equity funds that shows evidence of stock-selection...

This paper analyzes the economics of the private equity fund compensation. We build a novel model to estimate the expected revenue to fund managers as a function of their investor contracts. In particular, we evaluate the present value of the fair-value test (FVT) carried interest scheme, which...

We examine the role of high-water mark provisions in hedge fund compensation contracts. In our model of competitive markets and asymmetric information on manager ability, a fee contract with a high-water mark can improve the quality of the manager pool entering the market. In addition, a...

Leveraged and inverse Exchange-Traded Funds (ETFs) have become increasingly popular in recent years and have attracted significant assets. This paper develops a very general mathematical framework for assessing the long-term performance of leveraged and short investment funds based on stochastic...

The starting point in this research in the analysis of dynamic and structure of assets of investment funds in particular types of funds (assets, hybrids, money market funds, stable growth funds). Analyzing time series of assets of funds the tendency of growth can be noticed. The tendency is...