Quality incentives for fund sponsors.

Summary Does the fund sponsor have an incentive to improve the quality of its funds, given that it is costly with uncertain results and that its goal is to sell the maximum number of fund units? The answer to this question was addressed in three parts. 1) We explain how the literature has come to justify the study of incentives in portfolio management and we review the main results. 2) By proposing a definition of fund quality, we frame the conditions that constitute quality incentives for the fund sponsor in a vertically differentiated duopoly. 3) We study the system of fees and incentives for fund sellers in the United States, to test for the existence of conflicts of interest between investors and sellers. We finally open this work to the question of alternative strategies to fund promoters' performance in order to sell more.