Mutual funds form the bedrock of retirement savings in the United
States, and, considering their rapid growth, are sure to be more
critical in the future. Because the size of fees paid by investors to
mutual fund advisers can strongly affect the return on investment, these
fees have become a contentious issue in Congress and the courts, with
many arguing that investment advisers grow rich at the expense of
investors.
This ground-breaking book not only conceptualizes a new economic model
of the mutual fund industry, but also uses this model to test for price
competition between investment advisers, evaluating the assertion that
market forces fail to protect investors' returns from excessive fees.
Highly experienced authors track the growth of the industry over the
past twenty-five years and present arguments and evidence both for and
against theories of adviser malfeasance. The authors review the
regulatory history of mutual fund fees and summarize leading case
decisions addressing excessive fees.
Revealing the extent to which the governance structure of mutual funds
truly impacts fund performance, this book provides the best
understanding of today's mutual fund industry and is a vital tool for
investors, money managers, fund directors, securities lawyers,
economists, and anyone concerned with the regulation of mutual funds.