BIS report highlights asset managers' role in inefficient markets

The CGFS’s tentative findings – based on interviews with nearly 50 investors - were published today by the Bank for International Settlements (BIS). The committee found the prevalence of management against benchmark indexes in combination with typical compensation structures - that are determined by average assets under management - could “contribute to a loss of institutional asset managers’ ability to serve as a market control mechanism". For example, tightening of allowable tracking error

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