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Ahmed Taha

Professor Ahmed Taha tells the Wall Street Journal much mutual-fund advertising already exploits the tendency of investors

Thanks to a little-noticed provision tucked into the just-signed jobs bill, hedge funds may soon be making a bold move into marketing—and the mainstream. Continue reading »

Professor Ahmed Taha

Professor Ahmed Taha receives Joseph Branch Excellence in Teaching Award

The Joseph Branch Excellence in Teaching Award was presented to Professor of Law Ahmed Taha, who specializes in the regulation of consumer financial products and empirical studies of the behavior of judges and litigants, at the Founders’ Day Convocation on Feb. 17 in Wait Chapel. Continue reading »

Professor Ahmed Taha

How Selective Advertising by Mutual Funds Misleads Investors

Mutual fund companies attract investors with performance advertisements, which highlight a fund’s past returns.  The funds featured in performance advertisements are not randomly selected.  Continue reading »

Luck Is The Key To Success For Most Top Mutual Funds

Mutual fund advertisements are far too effective. Fund companies often promote actively managed funds that have generated high returns, and investors flock to such funds. Unfortunately for these investors, there is little relationship between high past returns and high future returns. Read the full story »

Don’t disregard past performance when choosing fund

Leafing through newspapers and magazines, I ran into these mutual fund ads:

From Janus: “100 percent of Janus equity funds have beaten their benchmarks since inception.”

From T. Rowe Price: “Proven performance that has stood the test of time. For each 3-, 5- and 10-year period ended Dec. 31, 2009, over 75 percent of our funds beat their Lipper average.” (That refers to the average performance of funds tracked by Lipper, a fund analysis firm.) Read the full story »

The Temptation (and Danger) of Past Investment Performance

Whenever a mutual fund advertises performance, the Securities and Exchange Commission requires that it includes the disclaimer that “past performance does not guarantee future results.” Read the full story »

When Ads Say Skill, Think Luck—Report

Mutual funds may need to come with a blunt warning label just like on a pack of Lucky Strikes.

In their quest to recruit Main Street investors seeking above-market returns, fund companies have long relied on newspaper and magazine ads to showcase portfolio managers’ best work. Difficult as that task seemed a year or two ago, the recent bull market has given these firms new opportunities to brag. Read the full story »

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Authors of first study of the regulation of mutual fund performance advertising say ban is likely needed

In a study that could have far-reaching implications for the more than 50 million U.S. households that invest in mutual funds, researchers have found that mutual fund performance advertisements are misleading investors by encouraging them to buy funds with high past returns. Continue reading »

Incubation bias: Not just a hedge fund issue according to two law professors

It is often argued that aggregate hedge fund performance data suffers from a near-fatal flaw: since it is voluntarily reported by the manager, hedge fund indices only include funds that the managers have deemed marketable.  In 2002, David Hsieh of Duke University and William Fung of London Business School wrote a seminal article on this issue called “Benchmarks of Hedge Fund Performance: Information Content and Measurement Biases.”Read the full story »

Chesney, Taha Promoted to Full Professorships

The law school congratulates Robert (Bobby) Chesney and Ahmed Taha on their promotions to full professor with tenure as of July 1, 2008.

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