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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
A guide to how your money is managed, with foreword by Nobel laureate Robert Shiller
The Fund Industry offers a comprehensive look at mutual funds and the investment management industry, for fund investors, those working in the fund industry, service providers to the industry and students of financial institutions or capital markets. Industry experts Robert Pozen and Theresa Hamacher take readers on a tour of the business of asset management. Readers will learn how to research a fund and assess whether it's right for them; then they'll go behind the scenes to see how funds are invested, sold and regulated. This updated edition expands coverage of the segments of the industry where growth is hottest, including hedge funds, liquid alternatives, ETFs and target date funds—and adds an introduction to derivatives.
Mutual funds are a key component of financial planning for 96 million Americans. Nearly a quarter of U.S. household savings are invested in funds, which give individual investors affordable access to professional management. This book provides a detailed look at how firms in the industry:
- Invest those savings in stocks and bonds
- Evaluate the risks and returns of funds
- Distribute funds directly to consumers or through financial advisors or retirement plans
- Handle the complex operational and regulatory requirements of mutual funds
- Vote proxies at the annual meetings of public companies
- Expand their operations across borders
Along the way, the authors describe the latest trends and discuss the biggest controversies—all in straightforward and engaging prose. The Fund Industry is the essential guide to navigating the mutual fund industry.
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Veröffentlichungsjahr: 2015
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Table of Contents
Title Page
Copyright
Foreword
Preface to the Second Edition
Acknowledgments
Section One: An Investor's Guide to Mutual Funds
Chapter 1: Investing through Mutual Funds
Advantages and Disadvantages of Mutual Funds
History and Growth
Regulators and Industry Associations
Chapter Summary
Notes
Chapter 2: How Mutual Funds Work
Buying and Selling Fund Shares
The Pass-Through Tax Status of Mutual Funds
A Virtual Corporation
Ethical Standards
Alternatives to Mutual Funds
Chapter Summary
Notes
Chapter 3: Researching Funds: The User Guides
Mutual Funds and Disclosure
The Summary Prospectus
Beyond the Summary Prospectus
Using the User Guides
Chapter Summary
Notes
Chapter 4: Comparing Mutual Funds
Delineating Your Own Investment Objectives
Evaluating Performance
The Taxonomy of Mutual Funds
Chapter Summary
Notes
Chapter 5: The Cost of Fund Ownership
The Focus on Fund Expenses
Distribution Expenses
Operating Expenses
The Management Fee
The Active versus Passive Debate
Chapter Summary
Notes
Section Two: Mutual Fund Portfolio Management
Chapter 6: Portfolio Management of Stock Funds
Stock Research
Putting It All Together: Managing a Stock Fund
Chapter Summary
Notes
Chapter 7: Portfolio Management of Bond Funds
Bond Fund Holdings
Putting It All Together: Managing a Bond Fund
Chapter Summary
Notes
APPENDIX to Chapter 7: Funds and Derivatives
Uses of Derivatives in Funds
Regulation of Derivatives in Funds
Notes
Chapter 8: Portfolio Management of Money Market Funds
Money Market Funds and the Financial System
Rule 2a-7
Money Market Fund Holdings
Putting It All Together: Managing a Money Market Fund
Chapter Summary
Notes
Chapter 9: Implementing Portfolio Decisions: Trading
The Importance of Trading
The U.S. Stock Markets
The Role of the Mutual Fund Trader
Trading in Bond Funds
Chapter Summary
Notes
Chapter 10: Mutual Funds as Stockholders
Mutual Funds and the Proxy Voting Process
Proxy Voting by Mutual Funds
Activism and Mutual Funds
Current Issues in Proxy Voting
Proxy Voting Outside the United States
Chapter Summary
Notes
Section Three: Sales and Operations
Chapter 11: Retail Distribution
What Sells Mutual Funds?
Distribution Channels
Fund Platforms
Distribution Strategy
Chapter Summary
Notes
Chapter 12: Retirement Saving through 401(k) Plans
The Benefits of Tax-Deferred Saving
History and Growth of 401(k) Plans
Contributions to 401(k) Plans
Investment Options in 401(k) Plans
Target Date Funds
Plan Administration
Chapter Summary
Notes
Chapter 13: Other Retirement Planning Options
Individual Retirement Accounts
Variable Annuities
The Future of Retirement Income in the United States
Chapter Summary
Notes
Chapter 14: Fund Operations
The Transfer Agent
Fund Accounting
Investment Operations
Chapter Summary
Notes
Section Four: Beyond Traditional Funds
Chapter 15: Exchange-Traded Funds
A Brief History
Advantages and Disadvantages
Legal Structure
Operations
Portfolio Holdings
The Future of ETFs
Chapter Summary
Notes
Chapter 16: Hedge Funds
Traditional Hedge Funds
Traditional Hedge Fund Investors
The New Hedge Funds: Liquid Alternatives
Chapter Summary
Notes
Section Five: The Internationalization of Mutual Funds
Chapter 17: Cross-Border Investing
The Growth in Cross-Border Investing
Advantages and Risks of Investing Overseas
Operational Challenges of Investing Overseas
Putting It All Together: Managing a Global or International Fund
Chapter Summary
Notes
Chapter 18: Cross-Border Asset Gathering
The Global Market for Investment Funds
Models for a Global Fund Business
The UCITS Model
Chapter Summary
Notes
APPENDIX to Chapter 18: Gathering Fund Assets through Retirement Plans
Chile's Retirement System
Singapore's Retirement System
Notes
About the Companion Website
About the Authors
Robert Pozen
Theresa Hamacher, CFA
Index
End User License Agreement
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Guide
Cover
Table of Contents
Foreword
Preface to the Second Edition
Section One: An Investor's Guide to Mutual Funds
Begin Reading
List of Illustrations
Figure 1.1
Figure 1.2
Figure 1.3
Figure 1.4
Figure 2.1
Figure 2.2
Figure 3.1
Figure 4.1
Figure 4.2
Figure 4.3
Figure 4.4
Figure 4.5
Figure 4.6
Figure 4.7
Figure 5.1
Figure 5.2
Figure 5.3
Figure 5.4
Figure 5.5
Figure 6.1
Figure 6.2
Figure 6.3
Figure 7.1
Figure 7.2
Figure 7.3
Figure 7.4
Figure 7.5
Figure 8.1
Figure 9.1
Figure 9.2
Figure 9.3
Figure 10.1
Figure 11.1
Figure 11.2
Figure 11.3
Figure 12.1
Figure 12.2
Figure 12.3
Figure 12.4
Figure 12.5
Figure 12.6
Figure 13.1
Figure 13.2
Figure 13.3
Figure 13.4
Figure 14.1
Figure 14.2
Figure 15.1
Figure 15.2
Figure 15.3
Figure 15.4
Figure 16.1
Figure 16.2
Figure 17.1
Figure 17.2
Figure 17.3
Figure 18.1
Figure 18.2
Figure 18.3
Figure 18.4
Figure 18.5
Figure 18A.1
Figure 18A.2
Figure 18A.3
Figure 18A.4
List of Tables
Table 1.1
Table 1.2
Table 2.1
Table 3.1
Table 3.2
Table 4.1
Table 4.2
Table 4.3
Table 4.4
Table 5.1
Table 5.2
Table 5.3
Table 5.4
Table 5.5
Table 6.1
Table 6.2
Table 6.3
Table 8.1
Table 9.1
Table 10.1
Table 10.2
Table 12.1
Table 14.1
Table 15.1
Table 15.2
Table 16.1
Table 16.2
Table 17.1
Table 18.1
Table 18.2
Table 18.3
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For a list of available titles, visit ourWeb site at www.WileyFinance.com.
The Fund Industry
How Your Money Is Managed
Second Edition
ROBERT POZEN AND THERESA HAMACHER
Foreword byRobert J. Shiller
Cover image: ©iStockphoto.com/traffic_analyzer
Cover design: Wiley
Copyright © 2015 by Robert Pozen and Theresa Hamacher. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
The First edition of The Fund Industry was published by John Wiley & Sons, Inc., in 2011.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 7508400, fax (978) 646–8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748–6011, fax (201) 748–6008, or online at http://www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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Library of Congress Cataloging-in-Publication Data
Pozen, Robert C.
The fund industry : how your money is managed / Robert Pozen and Theresa Hamacher. – 2nd Edition.
pages cm. – (Wiley finance series)
Includes index.
ISBN 978-1-118-92994-0 (cloth) – ISBN 978-1-118-92995-7 (ePub) – ISBN 978-1-118-92996-4 (ePDF) 1. Mutual funds–United States. 2. Mutual funds. I. Hamacher, Theresa. II. Title.
HG4930.P63 2015
332.63′27–dc23
2014031897
Foreword
I like this book because it gives a real understanding of the mutual fund industry, the provider of the most important investing vehicles for most people. Intelligent investing requires just the kind of understanding that is given in this book. One needs to know where the returns are coming from and how the mutual fund's strategy relates to one's own issues. One should not rely exclusively on others' advice, or simple tabulations of past performance of mutual funds, or predictions of future performance. The actual record of such predictions ranges from uneven to wrong.
The book clearly explains the different types of mutual funds and how they are each run to achieve their objectives. It has a particularly good chapter on how investors can utilize fund measurement services, like Lipper or Morningstar, which apply their own methodologies to analyze fund performance. Their analyses can be easily misused by investors who do not know what they are doing.
The second edition has expanded coverage of the newest and most sought-after products in the industry today—with separate chapters on exchange-traded funds and hedge funds. And it reviews the spectacular growth of the liquid alternative funds.
The book goes on to identify the key strategies that fund investors and managers can adopt to optimize their tax efficiency with mutual funds. These include tax-advantaged vehicles for retirement planning, college savings, and charitable giving. Taxation matters immensely for investment performance, and yet many investors neglect to consider properly how their own specific situation should impact their choice of mutual funds.
In addition, the book has two chapters on international investing. One explores the special challenges of buying securities in foreign markets. The other discusses the barriers faced by U.S. managers trying to sell their funds to foreign investors. Many investors are not well diversified internationally. The information here can help them feel more comfortable taking the plunge into the world market.
In the process, the book analyzes many of the important policy questions that are much debated in the industry as well as academia and the press. Are the expenses of mutual funds too high? Are the independent directors effective watchdogs for fund shareholders? Are mutual funds as large investors holding the executives of public companies accountable? Are index funds superior to actively managed funds—in which asset categories?
The second edition continues to be written in a straightforward and engaging manner for nonexperts, with helpful summaries at the end of each chapter. Instead of taxing the reader, the second edition expands the Internet supplements on technical subjects like derivatives and bond terms.
In sum, I recommend this book not only for fund investors and those working in the fund industry—and those thinking about working there—but also for students of financial institutions and service providers to the industry: accountants, lawyers, and even journalists.
Robert J. ShillerSterling Professor of Economics at Yale UniversityWinner of the 2013 Nobel Prize in Economic Sciences,together with Eugene Fama and Lars Peter Hansen of theUniversity of Chicago
Preface to the Second Edition
We were surprised by how much has changed in the fund industry over the past four years. When we submitted the manuscript to the first edition in the summer of 2010, we thought we had a pretty good picture of what the business would look like in the post-credit-crisis world. By that time, the collapse of Lehman Brothers was an old story, and the Dodd-Frank financial reform was the new law of the land.
But, as usual, reality has a way of defying expectations. The speed and the magnitude of the changes were breathtaking; for example, mutual funds and hedge funds were converging at a much faster pace than we anticipated. And there were a host of smaller changes, like the adoption of a pay-to-play rule by the SEC and the development of a new data source on distribution through intermediaries—the latter resulting from the explosion in the use of omnibus accounts for shareholder recordkeeping.
To capture this new reality, we needed to make some significant changes in this book. This second edition has:
Expanded chapter on ETFs
. Now that exchange-traded funds are 10 percent of the industry's total assets, we felt that they deserved a chapter of their own, which gave us more room to review their investment approaches and the outlook for their future.
New chapter on hedge funds
. We moved the discussion of hedge funds to a separate chapter as well, given their continued rapid growth. This chapter was entirely revamped to reflect the major changes in private fund regulation wrought by Dodd-Frank and the JOBS Act and to add a discussion of the melding of hedge funds and mutual funds in a category called
liquid alternatives
.
Increased coverage of retirement
. As the importance of retirement savings programs to industry growth has increased, so has this book's coverage of them. Our single chapter on retirement planning in the United States has become two in this edition, with expanded discussions of target date funds and annuities. And the final chapter now has an appendix that focuses on retirement systems in two countries.
Chapter dedicated to fund expenses
. The cost of owning a mutual fund continues to be an area of focus for investors, regulators, and industry observers. We've created a separate chapter on expenses from material that had previously been sprinkled throughout the book, to provide a comprehensive view of fund fees and the debate surrounding them.
Coverage of derivatives
. By popular demand, we've added an introduction to derivatives and an overview of their use in funds.
Complete updates
. And we've thoroughly updated all of the other chapters to reflect the latest data, commentary, regulations, and trends—from the revised Morningstar classification system for fixed income funds to the adoption of AIFMD in Europe to the debate over high-frequency trading.
To make room for all of this new matter, we've taken advantage of the Internet and published some sections there. The companion website for this book contains:
A new introduction to derivatives in three separate articles covering “The Basics,” “Futures, Forwards, and Swaps,” and “Options and Credit Default Swaps.”
The overview of fixed income securities, titled “Bond Basics.”
Supplemental material referenced throughout the book.
Footnotes to the text, which have been expanded to provide a comprehensive reference to sources, including legal citations.
Teachers will find materials just for them online at www.wiley.com/go/fundindustry2, including PowerPoint summaries for classroom use.
Yet, despite all the changes, the essence of this book remains the same: The Fund Industry is written for anyone who'd like to know how their money is managed. It's a practical guide, going behind the scenes at fund management companies to explain how they select investments for fund portfolios, sell fund shares around the globe, and provide service to fund shareholders.
It's a complex industry, offering thousands of funds—governed by detailed laws and regulations—through intermediaries, direct sales, and retirement plans. And it's a very important industry, responsible for almost a quarter of the savings that Americans rely on to fund the purchase of a home, a comfortable retirement, or a college education.
We've worked in the industry for a combined total of 57 years, and we're honored to have the opportunity to share our knowledge of investment management with those who work in the industry, oversee its activities, and invest in mutual funds.
This book is divided into five sections:
Section One: An Investor's Guide to Mutual Funds
looks at funds from an investor's perspective. We review the advantages and disadvantages of mutual funds, describe how they work, and explain how investors can gather research for potential fund investments. We explore the different categories of mutual funds and review how investors might choose funds within each. We wrap up with a review of the costs of owning a mutual fund.
Section Two: Mutual Fund Portfolio Management
examines how funds manage their investments. We discuss portfolio management in stock, bond, and money market funds and then examine how funds implement investment decisions through trading. We conclude with an overview of how mutual funds exercise their responsibilities as substantial stock investors. An appendix provides an overview of the use of derivatives in funds.
Section Three: Sales and Operations
examines two other critical aspects of the mutual fund business: the sale of mutual fund shares to investors and fund operations. We begin by surveying retail sales through intermediaries and directly to consumers through the direct channel. The next two chapters discuss the use of funds in 401(k) plans and in other retirement savings vehicles, namely individual retirement accounts and annuities. The last chapter in the section reviews funds' client service and portfolio recordkeeping operations.
Section Four: Beyond Traditional Funds
examines two fast-growing alternatives to traditional mutual funds: exchange-traded funds, or ETFs, and hedge funds. In separate chapters, we look at the regulations governing them, their investor base, their investment approaches, and their prospects for the future.
Section Five: The Internationalization of Mutual Funds
opens with a look at the investment and operational issues faced by U.S. mutual funds investing abroad. We then examine the special challenges involved in distributing funds around the world, with a focus on the European Union's successful model for cross-border distribution. We close with an appendix that reviews two retirement systems outside the United States and Europe and the role of mutual funds within them.
Acknowledgments
We'd like to thank the following subject matter experts who took the time to provide background information and review drafts. They are:
Chapter
3
on disclosure documents
: Judy Hogan.
Chapter
7
on bond funds
: Jerry Webman.
Chapter
8
on money market funds
: Jane Heinrichs.
Chapter
9
on trading
: Daniel Farrell.
Chapter
10
on proxy voting
: Matthew R. Filosa.
Chapter
11
on retail distribution
: Lee Kowarski.
Chapters
12
and
13
on retirement
: Members of the NICSA Retirement Committee: co-chairs Allan Browns and Perri Williams and members Holly Denton and Sharon Scheid. Also, the retirement specialist team at OppenheimerFunds.
Chapter
13
on IRAs and annuities
: Danielle Holland and Frank O'Connor.
Chapter
14
on fund operations
: John Gray and NICSA board members Brian Jones and Fred Quatrocky.
Chapter
15
on ETFs
: Karl-Otto Hartmann.
Chapter
16
on hedge funds
: Joseph H. Morgart and Karl-Otto Hartmann.
Chapters
17
and
18
on cross-border investing and asset gathering
: Christopher R. Bohane.
Appendix to Chapter
18
on Chile and Singapore
: Lourdes Long.
We thank the following individuals for their fast responses to our questions: Tony D'Elia, Frank Polefrone, Debbie Seidel, Eileen Storz-Salino, Shiv Taneja and Mark Trenchard.
Bob thanks his wife Liz for her patience and support. He thanks Bob Shiller for graciously agreeing to write the Foreword to the book. He also is grateful to Theresa for taking the lead in doing the substantial revisions needed to produce such an excellent second edition.
Theresa thanks the NICSA staff and the NICSA board for their support. She also thanks her husband, Greg Schumaker, who agrees that the second edition was a lot easier than the first.
Robert PozenTheresa HamacherOctober 2014
Section OneAn Investor's Guide to Mutual Funds
Mutual funds are designed to make life easier for investors. Funds give savers of even modest means a convenient access to top-quality investment management at a reasonable price.
Since the mission of funds is to serve investors, we start this book by taking a look at mutual funds from an investor's perspective. We give an overview of mutual funds by focusing on five critical questions:
Why invest through mutual funds?
How do mutual funds work?
How do investors research a potential mutual fund purchase?
How do investors choose a mutual fund that's right for them?
What does it cost to own a mutual fund?
This section has five chapters:
Chapter 1 provides an introduction to investing through mutual funds. It reviews their advantages and disadvantages, summarizes their history, and discusses how they are used by investors today. It concludes by providing an overview of the entities that work to ensure that funds meet their obligations to investors: the government regulators and the industry associations.
Chapter 2 describes the basic structure and operations of a mutual fund. It begins with a discussion of two key fund features: daily liquidity at net asset value and pass-through tax status. It explains how funds operate through contracts with service providers supervised by a board of directors, and it discusses the ethical standards that apply to fund managers. Finally, it compares mutual funds to alternative methods of investing, either directly in securities or through other commingled investment vehicles.
Chapter 3 explains how investors can learn about potential mutual fund investments through information provided by the funds themselves. It begins with a review of the principle of disclosure. It then focuses on the summary prospectus of a mutual fund and continues with an overview of the other parts of the prospectus and of the shareholder reports. It ends with a discussion of how investors can use this information to select mutual funds.
Chapter 4 discusses how investors might go about choosing a mutual fund. It places funds in the context of a personal financial plan and then explains the various approaches to evaluating fund performance results. It next reviews each type of mutual fund and ends with a discussion of the factors investors should consider when choosing funds in that category.
Chapter 5 discusses the importance of mutual fund fees and explains the charges that investors pay when they own a fund. It also reviews the controversy regarding those fees, especially the level of the management fee. Finally, it reviews the arguments in favor of both passive (index) and active investing, a discussion that is very relevant to mutual fund fees because of the differing costs of the two types of investing.
Chapter 1Investing through Mutual Funds
The odds are high that you already own a mutual fund. You're in good company: at the end of 2013, an estimated 96 million people in the United States had, on average, invested 22 percent of their money through a fund.1 Notice that we say that you invest through a mutual fund rather than in a fund. That's because a mutual fund isn't really an investment itself; it's just an intermediary—a financial intermediary.
Mutual funds have made it easy for individuals (you, me, and anyone with money to invest) and institutions (corporations, foundations, pension funds) to pool their money to buy stocks, bonds, and other investments. A fund is mutual because all of its returns—from interest, dividends, and capital gains—and all of its expenses are shared by the fund's investors.
Funds offer investors advantages over buying and selling securities directly, including:
Reduction of risk by investment diversification.
Ability to sell your investment daily.
Access to the expertise of professional money managers.
Ability to participate in investment strategies that might not otherwise be available to smaller investors.
Administrative convenience and shareholder services.
A high level of investor safeguards.
Comprehensive reporting that enables easy comparisons among funds.
These benefits have proven to be very popular with investors around the world; they held a total of $30 trillion in fund assets at the end of 2013. U.S. households now put more of their money into mutual funds than they do directly into stocks, making mutual funds an integral part of financial planning for many people. We describe a few typical fund buyers in “Mutual Fund Investors.”
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
