Russell Wermers


Russ Wermers is Professor of Finance at the Smith School of Business, University of Maryland at College Park, where he won a campus-wide teaching award during 2005 and a Krowe Teaching Award (within the Smith Business School) during 2013. His main research interests include studies of the efficiency of securities markets, as well as the role of institutional investors in setting stock prices. In addition, he studies and teaches quantitative equity strategies, and is currently researching microfinance institutions in Thailand. Most notably, his past research has developed new approaches to measuring and attributing the performance of mutual funds, pension funds, and hedge funds, as well as devising winning strategies for investing in these funds.

The Looming Risk of Low Fees

Active, Passive Investment Management Race Heats Up

SMITH BRAIN TRUST – The race between active and passive investment management is starting to get really interesting.

For years, investors have flocked to passively managed investment funds, drawn by their low fees and the predictability of performing almost as well as a theoretical market index (since index funds have costs and indexes do not).

‘Sharks’ Losing Ground to ‘Prey’ in Markets

Since the global financial crisis, “active” fund managers — stock pickers looking to beat the market — have lost ground to their “passive“ counterparts, as investors shun stock pickers amid concerns over bad performance and high fees. Smith School finance professor Russell Wermers compares the situation to the shark-prey relationship. "We need both in the water to make the world go round properly," he says. Read more...

'Say on Pay' Curbs Excessive Compensation—in Some Cases

Say on Pay, which gives shareholders a nonbinding vote on executive compensation, leads companies to reduce excessive pay in certain circumstances. That's according to new research by Smith professor Russ Wermers and a coauthor. Previous academic studies of Say on Pay have found mixed results, with some concluding that the provision—part of the Dodd-Frank legislation and in effect since 2011—has had no effect. But Wermers says: "Say on Pay does empower small institutional shareholders." Read more...

Picking a Mutual Fund Manager? Look for Low Fees

Finding a stock picker who can beat the market can be daunting, as many mutual funds that outperform over a short period struggle to repeat the feat in the long run. Russ Wermers, professor of finance and director of the Center for Financial Policy at the Smith School, tells the Wall Street Journal’s Weekend Investor that figuring out which manager got lucky and which manager has skill is tough. “It’s incredibly difficult to judge the quality of a fund ahead of time,” Wermers said. Read the full article, How to Pick a Stock Picker.


Subscribe to RSS - Russell Wermers