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Birdthistle, William A.; Morley, John --- "Introduction to the Research Handbook on the Regulation of Mutual Funds" [2018] ELECD 835; in Birdthistle, A. William; Morley, John (eds), "Research Handbook on the Regulation of Mutual Funds" (Edward Elgar Publishing, 2018) 1

Book Title: Research Handbook on the Regulation of Mutual Funds

Editor(s): Birdthistle, A. William; Morley, John

Publisher: Edward Elgar Publishing

ISBN: 9781784715045

Section Title: Introduction to the Research Handbook on the Regulation of Mutual Funds

Author(s): Birdthistle, William A.; Morley, John

Number of pages: 7

Extract:

Introduction to the Research Handbook on the Regulation of Mutual Funds William A. Birdthistle and John Morley
Mutual funds are the way Americans invest today. In legal theory, the platonic ideal of a corporate relationship may still be the one between shareholder and firm, but, increasingly, that fundamental dyad is being intermediated by an investment fund. Whereas institutional investors owned less than 10 percent of the stock of America's largest 1,000 public companies in the 1950s, now investment funds hold more than 50 percent of public equity.1 Some of those holdings rest in the hands of hedge funds and private equity funds, whose exotic deals and outrageous fortunes capture the public imagination. But the most ubiquitous investment vehicles--particularly for ordinary American households--are mutual funds, which today hold $22 trillion in the United States and almost $50 trillion globally.2 The assets of these funds have long been important to the funds' shareholders, of course, but in recent years the gravitational force of mutual funds has waxed sufficiently powerful to begin to shape the broader American economic landscape and the governance of companies in which mutual funds invest. The rise of mutual funds owes much to the shift, over the past 40 years in the United States, from defined benefit pension plans to defined contribution accounts. Since Section 401(k) was added to the Internal Revenue Code in 1978, eponymous 401(k) accounts have grown to hold more than $5 trillion dollars.3 And within those ...