Mutual Fund Advisory Contracts: An Empirical Investigation
AbstractWe investigate marginal compensation rates in mutual fund advisory contracts and find the following. Equity and foreign fund advisors receive higher marginal compensation than debt and domestic fund advisors. Advisors of funds with greater turnover receive higher marginal compensation. Also, closed-end fund advisors receive higher marginal compensation than open-end fund advisors. Finally, we find that marginal compensation is lower for advisors of large funds and members of large fund families. We argue that these differences in marginal compensation reflect differences in advisor marginal product, differences in the difficulty of monitoring performance, differences in control environments, and scale economies. Copyright The American Finance Association 2002.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by American Finance Association in its journal The Journal of Finance.
Volume (Year): 57 (2002)
Issue (Month): 1 (02)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Manuel Ammann & Michael Verhofen, 2009. "The impact of prior performance on the risk-taking of mutual fund managers," Annals of Finance, Springer, vol. 5(1), pages 69-90, January.
- Clifford, Christopher P., 2008. "Value creation or destruction? Hedge funds as shareholder activists," Journal of Corporate Finance, Elsevier, vol. 14(4), pages 323-336, September.
- Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2006. "Managerial incentives and risk-taking," Journal of Financial Economics, Elsevier, vol. 79(2), pages 431-468, February.
- Clemens Sialm & Laura Starks, 2012.
"Mutual Fund Tax Clienteles,"
Journal of Finance,
American Finance Association, vol. 67(4), pages 1397-1422, 08.
- Kim, Youngsoo & Lee, Bong Soo, 2007. "Limited participation and the closed-end fund discount," Journal of Banking & Finance, Elsevier, vol. 31(2), pages 381-399, February.
- Cremers, Martijn & Driessen, Joost & Maenhout, Pascal & Weinbaum, David, 2009.
"Does Skin in the Game Matter? Director Incentives and Governance in the Mutual Fund Industry,"
Journal of Financial and Quantitative Analysis,
Cambridge University Press, vol. 44(06), pages 1345-1373, December.
- Martijn Cremers & Joost Driessen & Pascal Maenhout & David Weinbaum, 2005. "Does Skin in the Game Matter? Director Incentives and Governance in the Mutual Fund Industry," Yale School of Management Working Papers amz2470, Yale School of Management, revised 01 Nov 2008.
- Taylor, Jonathan, 2004. "A note on closet-indexing," Journal of Economics and Business, Elsevier, vol. 56(6), pages 431-441.
- Chen, Hsiu-Lang & Gao, Sheldon & Hu, Xiaoqing, 2012. "Closing and cloning in open-end mutual funds," Journal of Banking & Finance, Elsevier, vol. 36(4), pages 1210-1223.
- Cashman, George D., 2012. "Convenience in the mutual fund industry," Journal of Corporate Finance, Elsevier, vol. 18(5), pages 1326-1336.
- Lioui, Abraham & Poncet, Patrice, 2013. "Optimal benchmarking for active portfolio managers," European Journal of Operational Research, Elsevier, vol. 226(2), pages 268-276.
- Agarwal, Vikas & Gómez, Juan-Pedro & Priestley, Richard, 2011.
"Management compensation and market timing under portfolio constraints,"
CFR Working Papers
11-16, University of Cologne, Centre for Financial Research (CFR).
- Agarwal, Vikas & Gómez, Juan-Pedro & Priestley, Richard, 2012. "Management compensation and market timing under portfolio constraints," Journal of Economic Dynamics and Control, Elsevier, vol. 36(10), pages 1600-1625.
- Agarwal, Vikas & Gómez, Juan-Pedro & Priestley, Richard, 2012. "Management compensation and market timing under portfolio constraints," CFR Working Papers 11-16 [rev.], University of Cologne, Centre for Financial Research (CFR).
- Joanne Yoong & Angela A. Hung, 2009. "Self-Dealing and Compensation for Financial Advisors," Working Papers 713, RAND Corporation Publications Department.
- Cashman, George D. & Deli, Daniel N., 2009. "Locating decision rights: Evidence from the mutual fund industry," Journal of Financial Markets, Elsevier, vol. 12(4), pages 645-671, November.
- Pegaret Pichler, 2004. "Optimal Contracts for Teams of Money Managers," Econometric Society 2004 North American Winter Meetings 495, Econometric Society.
- Cashman, George D., 2010. "Pay-performance sensitivity and firm size: Insights from the mutual fund industry," Journal of Corporate Finance, Elsevier, vol. 16(4), pages 400-412, September.
- Palomino, Frederic, 2005. "Relative performance objectives in financial markets," Journal of Financial Intermediation, Elsevier, vol. 14(3), pages 351-375, July.
- Cécile Moigne & Patrick Savaria, 2006. "Relative importance of hedge fund characteristics," Financial Markets and Portfolio Management, Springer, vol. 20(4), pages 419-441, December.
- Javier Gil-Bazo & Pablo Ruiz-Verdu, 2006. "Yet Another Puzzle? The Relation Between Price And Performance In The Mutual Fund Industry," Business Economics Working Papers wb066519, Universidad Carlos III, Departamento de Economía de la Empresa.
- Gerald T. Garvey & Todd T. Milbourn, 2003. "Asymmetric Benchmarking in Compensation: Executives are Paid for (Good) Luck But Not Punished for Bad," Claremont Colleges Working Papers 2003-01, Claremont Colleges.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.