The importance of investment advisers to the financial well-being of their clients cannot be overstated. Individuals and institutions entrust trillions of dollars to investment advisers to manage on their behalf. This paper discusses and explains fiduciary principles in investment advice....

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...

Pichhadze (2010) introduced the Market Oriented Blockholder Model (MOBM) as properly describing the ownership pattern in the American equity markets. Under the model, the emerging blockholder in the American equity markets is the institutional investor (II). This poses a challenge to the...

Pichhadze (2010) introduced the Market Oriented Blockholder Model (MOBM) as properly describing the ownership pattern in the American equity markets. Under the model, the emerging blockholder in the American equity markets is the institutional investor (II). This poses a challenge to the...

We analyze whether institutional investors’ corporate bond holdings are associated with how actively they vote and monitor their equity investments. We document that institutions conduct more governance research and are less likely to follow proxy advisor vote recommendations for companies...

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...

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...

The article presents an overview of the assumptions and unintended consequences of the widespread adoption of modern portfolio theory (MPT) in the context of the growth of large institutional investors. We examine the many so-called risk management practices and financial products that have been...

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...