Many investors purchase open-end mutual funds through intermediaries, paying brokers and financial advisors for fund distribution and advice via alternative sale charge fee structures. We argue that the fee structure choice reveals valuable information about investors horizon. That allows...

We study compensation contracts of individual portfolio managers using hand-collected data of over 4,500 U.S. mutual funds. Variations in the compensation structures are broadly consistent with an optimal contracting equilibrium. The likelihood of explicit performance-based incentives is...

We show that risk-sharing considerations rationalize symmetric benchmark-adjusted ("fulcrum") fees in the compensation of informed active fund management. By tying fees symmetrically to the appropriate benchmark, investors can tilt a fund portfolio toward their optimal risk exposure and realize...