A fund's performance is usually compared to the performance of an index or other funds. If a fund trails the benchmark, the fund manager is often replaced. We argue that this may lead to excessive risk-taking if fund managers differ in ability and have the opportunity to take excessive risk. To...

Chapter 1: Introduction -- Chapter 2: Criteria for Mutual Fund Selection -- Chapter 3: Investment for Intermediate and Long Horizons -- Chapter 4: Estimating Future Performance – The Shrinkage Adjusted Sharpe Ratio -- Chapter 5: Active Versus Passive Investment -- Chapter 6: Target Date Funds,...