Abstract

http://ssrn.com/abstract=1108768
 
 

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Disclosure and Agency Conflict in Delegated Investment Management: Evidence from Mutual Fund Commission Bundling


Roger M. Edelen


University of California, Davis - Graduate School of Management

Richard B. Evans


University of Virginia - Darden School of Business

Gregory B. Kadlec


Virginia Polytechnic Institute & State University - Pamplin College of Business

February 1, 2011

AFA 2009 San Francisco Meetings Paper

Abstract:     
This study provides empirical evidence on the role of disclosure in resolving agency conflicts in delegated investment management. For certain expenditures fund managers have alternative means of payment which differ greatly in their opacity: payments can be expensed (relatively transparent); or bundled with brokerage commissions (relatively opaque). We find that the return impact of opaque payments is significantly more negative than that of transparent payments. Moreover, we find a differential flow reaction that confirms the opacity of commission bundling. Collectively, our results demonstrate the importance of transparency in addressing agency costs of delegated investment management.

Number of Pages in PDF File: 48

Keywords: Agency Conflict, Mutual Fund; Performance; Brokerage Commissions; Expenses.

JEL Classification: G24, G29

working papers series


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Date posted: March 26, 2008 ; Last revised: May 15, 2011

Suggested Citation

Edelen, Roger M. and Evans, Richard B. and Kadlec, Gregory B., Disclosure and Agency Conflict in Delegated Investment Management: Evidence from Mutual Fund Commission Bundling (February 1, 2011). AFA 2009 San Francisco Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1108768 or http://dx.doi.org/10.2139/ssrn.1108768

Contact Information

Roger M. Edelen (Contact Author)
University of California, Davis - Graduate School of Management ( email )
One Shields Avenue
Davis, CA 95616
United States
Richard B. Evans
University of Virginia (UVA) - Darden School of Business ( email )
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4030 (Phone)
434-243-7680 (Fax)
HOME PAGE: http://faculty.darden.virginia.edu/evansr/
Gregory B. Kadlec
Virginia Polytechnic Institute & State University - Pamplin College of Business ( email )
1016 Pamplin Hall
Blacksburg, VA 24061
United States
540-231-4316 (Phone)
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