Roger M. Edelen
Associate Professor of Management
Teaching Field and Research Expertise: Finance
Associate Professor Roger Edelen’s primary research interest is institutional investing. Much of his work has focused on the influence of operational and organizational factors on mutual fund performance, particularly relating to funds’ trading practices and shareholder flow. His research also includes the role of agency conflicts in secondary-market trading, and pricing dynamics in primary security offerings. His teaching interests are investments and derivative securities.
Before to coming to UC Davis, Edelen was assistant professor of finance at Boston College and the Wharton School, University of Pennsylvania. He also gained four years of experience in the investment management industry, acting as director of research at ReFlow Management, a mutual fund liquidity service provider; director of enhanced equity strategies at Mellon Capital Management; providing litigation and financial product development consulting; and options trading with O’Connor and Associates, a Chicago-based market making firm (now UBS).
He holds a Ph.D. in finance from the University of Rochester, and an MBA and B.S. in mathematics from the University of Texas at Austin.
Room 3214
Study sheds light on funds’ hidden trading costs
Price is often the critical factor when mutual fund companies compete for business. They want to be able to tout the lowest expense ratios for their funds. That’s the figure that shows how much investors pay to cover operational costs. But it isn’t the only cost you should be thinking about.
There’s another significant cost that’s harder to quantify, isn’t disclosed, and remains largely invisible: expenses from the trades that the fund manager makes.
Shedding Light on ‘Invisible’ Costs: Trading Costs and Mutual Fund Performance
Associate Professor Roger Edelen
Co-Authors: Evans, R., University of Virginia and Kadlec, G., Virginia Tech
How Mutual Fund Trading Costs Hurt Your Bottom Line
Study measures the impact of invisible fees
When investors are shopping around for mutual funds, they have a wealth of data at their fingertips. They know, for instance, how much a given fund charges in management and operational fees (its expense ratio). They also know how a particular fund has performed over various time periods and what type of investments management held as of the most recent reporting date.
High Expense Ratios Hurt, But Watch Turnover, Too
The Hidden Cost of Doing Business: Investors know that fees are the enemy of return. But many may not realize the hidden costs incurred by their mutual funds. Interesting article by Barron’s about Associate Professor Roger Edelen’s latest research, revealing the three “invisible” costs that are eroding returns.
How Mutual Fund Trading Costs Hurt Your Bottom Line
When investors are shopping around for mutual funds, they have a wealth of data at their fingertips. They know, for instance, how much a given fund charges in management and operational fees (its expense ratio). They also know how a particular fund has performed over various time periods and what type of investments management held as of the most recent reporting date.
Uncovering Hidden Costs of Mutual Fund Investing
The expense ratio is one of the few reliable predictors of mutual fund return performance, and the increasing market share of low-cost index and exchange-traded funds suggests that investors use this information when making investment decisions.
Symposium Shines Spotlight on Private Equity
By Alex Russell
The Graduate School of Management hosted its second annual Symposium on Financial Institutions & Intermediaries in March, bringing together two dozen top scholars and industry practitioners from around the world.
Organized by Associate Professors Ayako Yasuda and Roger Edelen, the symposium focused on private equity, an asset class that typically raises capital from institutional investors to invest in companies that are already private or are public and then taken private.
Symposium Shines Spotlight on Private Equity
By Alex Russell
The Graduate School of Management hosted its second annual Symposium on Financial Institutions & Intermediaries in March, bringing together two dozen top scholars and industry practitioners from around the world.
Organized by Associate Professors Ayako Yasuda and Roger Edelen, the symposium focused on private equity, an asset class that typically raises capital from institutional investors to invest in companies that are already private or are public and then taken private.
Investor Base, Cost of Capital, and Firm Performance: The Case of Post-Issuance Anomalies
In this study, Associate Professor Roger Edelen and co-authors Ozgur Ince and Gregory B. Kadlec from Virginia Tech examine the link between a firm’s investor base, discount rate, capital budgeting decisions, and profitability, arguing that a downward shift in discount rates associated with an expanded investor base can account for both poor stock returns and operating performance following security offerings.
UC Davis Symposium on Financial Institutions & Intermediaries 2012
This is the second annual symposium on financial institutions and intermediaries. Co-chaired by Professor Yasuda and Professor Edelen, this year’s symposium features guests from around the world to discuss key topics on private equity.
New Finance Symposium Focuses on Hedge and Mutual Funds
by Jacqueline Romo
Assistant Professors Ayako Yasuda and Roger Edelen recently teamed up to organize the UC Davis Symposium on Financial Institutions & Intermediaries 2011, a one-day conference that brought more than two dozen leading scholars and practitioners to Gallagher Hall on April 1.
This first annual event focused on the nexus of mutual and hedge funds, drawing on the expertise at the School. “Roger and I picked a topic that not only showcased the GSM finance faculty, but one that would encourage engagement from practitioners and academicians alike,” explained Yasuda. “This invitation-only event brought together people knowledgeable about intermediaries from very different perspectives.”
Three Mutual Funds That Take Their Time
Roger Edelen, finance professor at UC Davis, is quoted in this story about low-turnover mutual funds, noting that frequent trading can be a big — and largely invisible — drag on returns.
203A Data Analysis for Managers
Introduces statistics and data analysis for managerial decision making. Descriptive statistics, principles of data collection, sampling, quality control, statistical inference. Application of data-analytic methods to problems in marketing, finance, accounting, production, operations and public policy.
Smart Money Bets On Recovery
A study by Roger M. Edelen, an assistant professor of management at the UC Davis Graduate School of Management, with colleagues at Boston College, concluded that institutional investors are less reactive to shifts in market sentiment than retail investors and better at collecting and processing information about future prospects.
The Relative Sentiment Indicator: On the Asset Allocation Decisions of Institutional vs. Retail Investors
Financial Analysts Journal, 2010
In this study, Associate Professor Roger Edelen and co-authors Alan J. Marcus and Hassan Tehranian from Boston College measured retail investor sentiment relative to that of institutional investors by comparing their respective portfolio allocations to equity versus cash and fixed-income securities. The results suggest that fluctuations in retail sentiment are a primary driver of equity valuations for reasons unrelated to fundamentals.
Disclosure and Agency Conflict in Delegated Investment Management: Evidence from Mutual Fund Commission Bundling
American Finance Association San Francisco Meetings Paper, 2009
This study provides empirical evidence on the role of disclosure in resolving agency conflicts in delegated investment management. For certain expenditures, fund managers have alternative means of payment which differ greatly in their opacity: payments can be expensed (relatively transparent); or bundled with brokerage commissions (relatively opaque).