They have been attacked by many academics and progressive politicians. Now, with a new administration, the battle could soon get even more heated. Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, shares insights into stock buybacks.

The stock market is often misused as a bellwether for the economy, especially in political debates. Yet the market has never reliably moved in concert with the economy. And today the connection between the two is weaker than at any point since World War II, according to research by Rene Stulz, Everett D. Reese Chair of Banking and Monetary Economics at Fisher, and a colleague.

This new study by Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, and his colleagues crunches the numbers and finds the disconnect between the stock market and the economy increases as valuations become more stretched.

A paper by Frederik P. Schlingemann and Rene M. Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, seems to confirm New York Times columnist Paul Krugman's suspicions. It’s titled “Has the stock market become less representative of the economy?”, and its conclusion seems to be yes, at least as far as jobs are concerned.

On its surface, the structure of hedge fund incentive fees appears to closely align the incentives of hedge fund managers and hedge fund investors. But how do these incentive fees fare in practice? Research from Itzhak Ben-David, the Neil Klatskin Chair in Finance and Real Estate, Associate Professor of Finance Justin Birru, and a colleague explores these fees.

The trend to passive investing has led to a dramatic increase in the share of assets concentrated in the hands of a few large institutional fund companies. Research by Itzhak Ben-David, the Neil Klatskin Chair in Finance and Real Estate, and his colleagues concluded that “ownership by large institutions is associated with higher stock price volatility, autocorrelation in returns (a measure of price inefficiency), and a greater magnitude of price drops at times of market stress (a measure of price fragility).”

If you already see hedge fund fees as exorbitant, you ain’t seen nothing yet. Over the past two decades, the hedge fund industry has kept 64 cents of every dollar of gross profits that it has generated above the risk-free rate. This, according to research by Itzhak Ben-David, the Neil Klatskin Chair in Real Estate and Finance, and Finance Professor Justin Birru, and a colleague.

This year, index fund investors are making money all right. But it's come with some risks: Much of the gains are due to half a dozen ultra-hot technology stocks. Lu Zhang, the John W. Galbreath Chair in Finance, provides some additional context to the presence of tech stocks in our portfolios.

Investors who put their money in hedge funds may find that the fees are much higher than expected, a new study from Itzhak Ben-David, the Neil Klatskin Chair in Real Estate, and Associate Professor of Finance Justin Birru suggests. Most hedge funds charge their clients incentive fees of about 20 percent of gains made over a specified benchmark. But in a study of 6,000 hedge funds over 22 years, researchers found that those fees ended up costing investors nearly 50 percent – about 2.5 times more than the average fee rate on paper.

A new study by Itzhak Ben-David, the Neil Klatskin Chair in Real Estate, and colleagues from Duke, examined thousands of finance executives’ S&P 500 projections over time for one behavioral bias: excess conviction. The study, a follow-up to an earlier research project, found the overconfidence bias to be greater than even the original landmark research found.

BlackRock, Vanguard, State Street, Fidelity and Capital Group are driving up equity market volatility and fuelling mispricing in company stocks, according to an analysis that raises fresh questions over the regulatory oversight of the largest asset managers. The study was produced by Itzhak Ben-David, the Neil Klatskin Chair in Real Estate, and his colleagues.

New research from Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, and his colleagues suggests that the share-price premium for entering Wall Street’s flagship index isn’t what it used to be.

Investors give up nearly half of their gross profits through incentive fees, according to a working paper authored by Itzhak Ben-David, the Neil Klatskin Chair in Real Estate, and Justin Birru, associate professor of finance, and a colleague.

As Tesla prepares to join the S&P 500, research by Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, and his colleagues reveals being listed on the index does not provide the same return as it used to.

Tesla could be the latest example of how inclusion in the S&P 500 weakens a company’s stock performance. According to research from Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, and his colleagues, beginning around a decade ago, getting added to the S&P 500 began to cause a company's stock to drop. This information has caused some to hypothesize that the S&P 500 could become easier to time and to beat.

It used to be good for stocks to be added to indexes, but that is changed in the past decade or so, according to new research from Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, and his colleagues. 

International coverage of research by Itzhak Ben-David, the Neil Klatskin Chair in Finance and Real Estate, reveals that because fund managers invest in a scattered portfolio of hedge funds and because of the jumps from fund to fund, investment profits are greatly diminished.

A new study from Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, and a colleague shows how profits are distributed — and it has some surprising conclusions. Total payouts to shareholders rose from 19 percent of operating profits from 1971-1999 period to 32 percent in 2000-2017; and buybacks alone accounted for 55 percent of the distribution in the 2000-2017 period, up from 22 percent in the 1971-1999 period. To emphasize: Stock repurchases soared.

Research from Itzhak Ben-David, the Neil Klatskin Chair in Finance and Real Estate, and Justin Birru, assistant professor in finance, shows that investors end up paying high fees for poor returns while managers accumulate personal fortunes.

There’s a two-out-of-three chance U.S. stocks will climb over the next six months — which is right about average. Research by Kewei Hou, the Ric Dillon Endowed Professor in Investments, and Lu Zhang, the John W. Galbreath Chair in Finance, illustrates just how difficult it is to replicate market conditions or effectively time the market. 

Research by Itzhak Ben-David, the Neil Klatskin Chair in Finance and Real Estate at Fisher, and Associate Professor of Finance Justin Birru, effectively shows that investors subsidize underperforming fund managers to the tune of $7 billion a year.

Research by finance professors Itzhak Ben-David, the Neil Klatskin Chair in Finance and Real Estate, and Justin Birru provide insights into how the "performance" fees that hedge-fund managers charge can walk off with most of your return.

Research from Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, and his colleagues is cited as being helpful in determining if there is a way of forecasting which Chinese companies would most likely be hurt the most by any eventual delisting from the U.S. Stock Exchange.

The stock market and the economy have been intertwined in the American psyche since the 1929 stock crash and the onset of the Great Depression. But stocks are not a reliable gauge of overall economic health, said Rene Stulz, the Everett D.

A new working paper by Rene Stulz, the Everett D. Reese Chair of Banking and Monetary Economics, and his colleagues has quantified the divide between the haves and have-nots when it comes the riskiest of all corporate asset classes -- equity -- and has found that when the going gets tough, the financially flexible get going.