Delegated asset management, and mutual funds in particular, have become the investment vehicle of choice for retail investors in capital markets worldwide. At the end of 2020, open-end mutual funds had a total of $63 trillion in assets under management globally, and almost half of all U.S. households owned shares of a mutual fund (2021 Investment Company Fact Book).
While there are clear benefits to professionally managed and diversified investment funds, the potential for agency conflicts have long been a concern. Historically, financial regulators have relied on disclosure requirements for funds as the solution to these potential conflicts. … Read more