Eller Professor of Finance Referenced in the Wall Street Journal

Dec. 7, 2020

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David Brown, assistant professor of finance in the Eller College of Management, was referenced in a December 4 Wall Street Journal article about target date funds.

The article cites Brown’s latest research on why investors might be paying too much for target-date funds, which give investors a varied portfolio that rebalances automatically over time as a certain goal—or date—gets closer.

“The problem is that target-date funds are funds that invest in other funds known as ‘funds of funds’,” says Brown. “Instead of spending extra to have a target-date fund manage their asset allocation, investors can replicate the portfolios using cheaper exchange-traded funds.”

Brown’s research shows that target-date fund investors paid excess fees of over $2.5 billion in 2017 alone. Moreover, some target-date funds underperform an exchange-traded fund benchmark by over one percent annually.

Brown joined the Eller College of Management in 2014 after earning his PhD in Business Administration (Finance) from the University of Colorado Boulder. His areas of research include institutional investors, asset management, price feedback and price informativeness, early-stage financing and IPOs, taxes and retirement planning. Prior to joining academia, he worked in high-frequency algorithmic trading and private student lending where he was involved in several fundraising efforts, ranging from $300,000 to $75 million.