There are two major institutional investors in the syndicated loan market: collateralized loan obligations (CLOs) and bank loan mutual funds. CLOs are closed-end funds while bank loan mutual funds are open-end funds that issue claims that are redeemable on demand. In this paper, we examine...

In recent decades, investors have wielded their voting power to influence the direction of corporate policy. Although mutual funds have widely varying voting patterns and predictable ideological disagreements, little is known about whether their underlying investors have similar preferences. I...

In the decade following the financial crisis of 2008, investment funds in corporate bond markets became prominent market players and generated concerns of financial fragility. The COVID-19 crisis provides an opportunity to inspect their resilience in a major stress event. Using daily microdata,...

Since the 2008 financial crisis, in which the Reserve Primary Fund "broke the buck," money market funds (MMFs) have been the subject of ongoing policy debate. Many commentators view MMFs as a key contributor to the crisis because widespread redemption demands during the days following the Lehman...

Mutual fund companies routinely advertise the past returns of their strong-performing, actively-managed equity funds. These performance advertisements imply that the advertised high past returns are likely to continue. Indeed, investors flock to these funds despite high past returns being a poor...

In Jones v. Harris Associates, the Supreme Court interpreted investment advisers' fiduciary duty regarding compensation for services under Section 36(b) of the Investment Company Act of 1940. The Court endorsed an open-ended Second Circuit standard over a more determinate Seventh Circuit test...

What motivates investors to hold American Depositary Receipts (ADRs) rather than the underlying stock of U.S. listed foreign firms? We analyze the investment allocation decision of actively-managed emerging market mutual fund managers. Although legal provisions are typically assumed to affect...

Unlike shareholders of ordinary companies, mutual fund shareholders do not sell their shares - they redeem them from the issuing funds for cash. We argue that this unique form of exit almost completely eliminates mutual fund investors' incentives to use voting, boards, and fee liability....

The Supreme Court's recent decision in Jones v. Harris Associates L.P. has highlighted the potential for agency conflicts in mutual funds, whose advisors have the de facto power to award themselves high fees. While the surrounding debate has focused on the extent to which market competition...

The AIFMD provides a harmonized European framework for regulating alternative investment funds. Prior to discussing its details, this chapter introduces to the AIFMD, discussing the developments that led to its adoption (Part 1), the AIFMD's principal objectives (Part 2) and its key tools for...