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New paper slams model portfolio boom for conflict of interest

So-called model portfolios -- off-the-shelf investment strategies often comprising bundles of ETFs -- are ridden with conflicts of interest, according a trio of academics, including Associate Professor from the Norwegian School of Economics Nataliya Gerasimova.

Associate Professor from the Norwegian School of Economics Nataliya Gerasimova. | Photo: https://sites.google.com/site/gerasimovanataliya/home

A booming USD 4.9trn branch of the US asset management industry is funneling investor cash into funds that are pricier and worse-performing than alternatives, new research claims.

So-called model portfolios -- off-the-shelf investment strategies often comprising bundles of ETFs -- are ridden with conflicts of interest that undermine one of the hottest and most opaque businesses on Wall Street, a trio of academics argues.

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