In this paper, we consider for the first time the impact of fund regulation on the international distribution of investment funds. We study the 2001 UCITS Directive of the European Union, which was put in place to mitigate fraud and promote investor confidence throughout Europe. We examine the...

I document portfolio pumping at the fund family level, a strategy that non-star fund managers buy stocks held by star funds in the family to inflate their performance at the quarter end. Families that heavily employ the strategy show strong evidence of inflated performance after 2002, when the...

Scholars have roundly criticized disclosure as a regulatory regime over the past decade for good reason. Disclosures—whether describing the terms of a loan or the risks of investing—purport to inform consumers. But who actually reads disclosures? We argue that mutual fund disclosures are...

This Article offers a broad theory of what distinguishes investment funds from ordinary companies, with ramifications for how these funds are understood and regulated. The central claim is that investment funds (i.e., mutual funds, hedge funds, private equity funds and their cousins) are...

The growth of the hedge fund industry and the proliferation of retail alternative funds in combination with the fundamental reshaping of the regulatory landscape for the hedge fund industry suggest that mutual funds are becoming more like hedge funds as a matter of investment strategy while...

Recently, several academic theories have expressed concern over the growth of index funds. Some have argued that the growth of index funds will afford the asset managers who provide them too much influence over the public companies they invest in, through increased voting power and engagement...

Mutual fund portfolio turnover ratios (PTR) are at the center of the short-termism debate, which criticizes corporate maneuvers taken to prop up near-term earnings at the expense of long-term, value focused investments and policies. Scholars and policymakers often rely on portfolio turnover...

Major index fund operators have been criticized as ineffective stewards of the firms in which they are now the largest shareholders. While scholars debate whether this passivity is a serious problem, index funds' generally docile approach to ownership is broadly acknowledged. However, this...

This paper reveals that mutual fund managers manipulate Morningstar ratings by inflating their month-end portfolio values when they are likely to finish the month near rating cutoffs. This star rating manipulation is more pronounced among small-cap funds, single-managed funds, funds with a...