, which may keep managers from fully internalising the effects of adverse outcomes on their portfolios. The fact that market … discipline may not be sufficient to ensure prudential behaviour among managers, combined with the externalities of this risk …

, which may keep managers from fully internalising the effects of adverse outcomes on their portfolios. The fact that market … discipline may not be sufficient to ensure prudential behaviour among managers, combined with the externalities of this risk …

, which may keep managers from fully internalising the effects of adverse outcomes on their portfolios. The fact that market … discipline may not be sufficient to ensure prudential behaviour among managers, combined with the externalities of this risk …

We present a model with dynamic investment flows, where fund managers have the ability to generate excess returns and …

uninformed managers (i.e. churning). We find that churning does not necessarily reduce the return that a representative investor … expects ex-ante from delegating trade to a manager. As uninformed managers churn, the level of noise in the market increases … and informed managers generate higher returns than in the absence of churning. When fundamental volatility is relatively …

portfolio theory (MPT) in the context of the growth of large institutional investors. We examine the many so-called risk …

strategies can benefit fund managers by accelerating skill revelation, while the downside risk is managed by manager exit. In the … steady state, a large number of new and unskilled managers exploit the value of this call option, driving down short …-term excess returns. A small number of experienced and skilled managers exploit scalable long-term investment opportunities …