A new study by an assistant professor of economics at Brown University had found that unlike pension funds, insurance companies, banks and financial advisers, mutual fund portfolio managers fail to monitor merger and acquisition activity by companies they are invested in, The New York Times reports.

As a result, M&A activity among companies that mutual fund are invested in is far higher and often results in poor deals.

"Mutual funds are not really acting in [the] interests of shareholders," said Lily Qiu, the author of the report. "Corporate managers may know that when they see a majority of their owners are mutual funds that they are kind of protected."

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