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Wall Street’s ‘Model Portfolio’ Boom Gets Slammed in New Paper

  • Research warns of conflict of interest in readymade strategies
  • Model portfolio industry is exploding in size, Broadridge says
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A booming $4.9 trillion branch of the U.S. asset management industry is funneling investor cash into funds that are pricier and worse-performing than alternatives, new research claims.

So-called model portfolios -- off-the-shelf investment strategies often comprising bundles of ETFs -- are ridden with conflicts of interest that undermine one of the hottest and most opaque businesses on Wall Street, a trio of academics argues