The assets under management of option-trading exchange-traded funds (ETFs) have grown more than 120-fold since 2018. This paper examines how flow-induced demand pressure and exogenous rollover trade demand pressure from option-trading ETFs affect the implied volatility surface. I show that demand pressure from these ETFs significantly affects implied volatility surface, with the magnitude of the effect varying with option characteristics—particularly moneyness and days to expiration—due to differences in option vega. In addition, liquidity frictions also explain the magnitude of impact. These findings suggest that flow-induced demand pressure plays an important role in shaping both the term structure and moneyness curve of implied volatility.

We investigate prices around timestamped informed trades using approximately 500,000 13D transactions from activist investors matched to TAQ trades. Activists are more price sensitive than non-activists, and are more likely to attempt to hide their trading by strategically choosing when and how to trade. Activists have lower execution quality, higher price impact, and lower realized spreads, suggesting that activists, on average, fail to hide among the uninformed. Activists with less information (as measured by lower returns) are better at hiding (that is, they have better execution quality). These results are reversed for hedge funds: hedge funds with better execution quality generate higher returns.

We develop a characteristic-based asset demand model in which cross-asset risk-return trade-offs vary with asset characteristics. The model relaxes the uniform substitution structure of the multinomial logit (MNL), accommodates large price elasticities, and enables recovery of investor-specific primitives, including alphas and factor loadings, from structural demand estimates. Applied to U.S. institutional equity holdings from 2000 to 2022, the model reveals meaningful deviations from MNL substitution patterns, particularly along the market equity dimension. The estimated average own-price elasticity is 77 percent higher than under the MNL, driven largely by investors whose portfolios imply cross-asset complementarity. Nonetheless, both elasticity estimates are substantially lower than those implied by CAPM calibrations. The model also uncovers heterogeneity in investor alphas: hedge funds earn near-zero alphas, while brokers earn up to five basis points annually.

This paper studies how securities lending affects mutual funds’ monitoring of portfolio firms. Contrary to the view that lending weakens governance by separating voting rights from ownership, I show that securities lending can enhance monitoring by revealing information embedded in short-selling demand. Using mutual fund voting data, I show that funds engaged in securities lending exhibit higher voting performance (“vote alpha”) around shareholder meetings, aligned with ex-post value-enhancing proposals. Lending funds vote more frequently and are less likely to support management in firms whose shares they lend, particularly on contentious agenda items, where management and the proxy advisor disagree, and on contested proposals, where outcomes are uncertain and votes may be pivotal. These effects are significantly stronger for funds that employ affiliated lending agents, consistent with an information transmission channel rather than selection. Overall, the evidence indicates that securities lending can strengthen mutual funds' role in corporate governance.

In this paper, we investigate the drivers of a recent shift in asset allocation away from Europe and toward the United States as documented in the factbook of the European Fund and Asset Management Association. We show that this shift is concentrated among funds that receive an ESG rating—specifically, Morningstar’s Globe Rating. This pattern highlights the potential role of ESG information in shaping cross-regional capital flows. Our hypothesis is that the supply of high ESG rated funds with an EU investment focus might be limited due to coverage issue of European issuers by ESG rating agencies and/or due to the financial materiality of the ratings (vs double materiality proned in Europe). This interpretation is consistent with our results showing that, after the introduction of SFDR 1.0, funds’ geographical allocations become even more sensitive to ESG issuer coverage, especially in Europe.