Asset allocation is profoundly influenced by at least two underappreciated concepts. First, tax-deferred accounts — for example, 401(k)s — are like partnerships in which the investor owns (1–tn) of the partnership principal and the government owns the remainder, where tn is the marginal...

This paper empirically examines the agency problems associated with the use of soft dollars in delegated portfolio management. We assume that active portfolio managers are hired to identify private information about mispriced securities, but in the absence of careful monitoring by investors or...

On average investors have an income replacement rate of 64 percent of their pre-retirement income, which in many cases results in a lower tax rate in retirement. We analyze the impact of declining withdrawal tax rates on the choice between taxable mutual fund investments and nondeductible IRAs....

In this article I contrast the investment behavior of institutional portfolios having pension assets with those portfolios having nonpension assets. Differences in incentive compensation plans and regulation give pension executives unique incentives to track benchmark indices. Accordingly,...