Historically, the literature on money management has not consistently applied the rational expectations equilibrium concept. We explain why and summarize developments in the money management literature that do apply this concept correctly. We demonstrate that the rational expectations...

This paper provides new evidence about returns to scale in asset management, and their connection with capital flows to funds by investors. Equity mutual funds have diminishing returns to scale at the industry level, while hedge and fixed income funds have increasing returns to scale. The...

We construct a fund-specific measure of crowding using the equity holdings overlap of 17,364 global funds which are actively managed. Funds in the top decile of crowding underperform the passive benchmark by 1.4% per year. The poor performance cannot be attributed to fees and transaction costs...

This article explores the relationships of mutual fund advertising and investor skill in making fund choices. Fund advertising dominates the choices of unsophisticated investors. Advertising appeals to investor emotions by resonating with current beliefs, not by providing information that...

What the study findings say is that there are identified input/output and profile variables that are significantly different between the Morningstar 500's (1999) large-cap mutual funds that are DEA performance efficient and inefficient. The Sharpe Index represents the DEA output variable. That...

This study provides in-depth coverage of important findings surrounding the question of why investors continue to buy underperforming actively managed mutual funds. This issue is complicated by the finding active managers have skill that allows them to add fund value, but which is not shared...

Since the 2003 mutual funds scandal, it has become quite clear that thoughtful, long-term individual investors should focus on identifying and investing in stewardship funds. The purpose of this study is to provide readily available approaches for individual investors to use in the...

The objective of this study is to take some of the mystery out of mutual fund revenue sharing, but without being able to say investors have transparent disclosure. Topics begin with the transition from directed brokerage to revenue sharing. The discussions that follow include directed brokerage...

This study provides mutual fund shareholders with a normative listing of transparent and traditionally opaque fees and expenses designed for most all funds. The most likely next step, if any, would be for a few "stewardship funds" to adopt the normative listing of transparent and traditionally...

This article provides in-depth discussion of important issues related to mutual fund distribution. The first two topics are fund distribution channel characteristics and Rule 12b-1 fees and distribution. Distribution channel characteristics discuss direct channel, advice channel, retirement...