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Welcome to Mutal Fund Optimizer!

We've created this informative blog to help improve investment intelligence and management of money, to help you better design portfolios to reduce risk, increase overall diversification, improve returns and save time and money.

Check back often for news, tips and success stories. Thank you! From your Mutual Fund Optimizer team!

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Mutual Fund Industry Supply Chain Model

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Figure 1 (click to enlarge) The mutual fund industry consists of a complex web of connections, many to many relationships, wherein information is exchanged for value. Dissecting each class of member in this diagram, you can imagine what type of information trades for what types of value. Value is created at the source, where mutual funds are generated and managed. Better fund cosntruction results in better value. Skilled fund managers tend to attract more assets under management (AUM). Even unskilled fund managers can too, if they have really good marketing, and good distribution via the channels. Skilled and unskilled investors gain access to that value thru a variety of channels, and are willing to pay management fees for that value. Some call this value "alpha", that is, the amount of return gained above what the market would otherwise bear. We can't forget risk, so investors are also 'buying' a certain degree of mitigation of risk which is another form of v...
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Why Common Sense and Why Now?

Making money today is not easy, and managing money successfully is even harder. With the global financial and economic crisis in full swing chief investment officers of mutal fund families, mutual fund managers, and their analysts must navigate an incredibly stormy sea. It is global and it is pervasive and is affecting every asset class. New regulations, reporting requirements, ethics, moral hazard and other non-core activities weigh on the ultimate time and focus available for optimizing mutual fund portfolios. Everyone is concerned with risk, volatility, diversification and the performance of their money relative to other potential investment choices. Mutual fund managers must retain existing clients, attract new clients, and avoid the "run-on" issues of mass redemptions that severely cripple the NAV of their fund(s). How to rebalance? What equities to buy? Which ones to sell? When? Which add to returns while also reducing risk? These questions and other problems can be ame...
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ETF v Mutual Funds; Why They're Less Risky

Because mutual funds are actively managed, and because their profit depends on Assets Under Management (AUM), their performances are often manipulated by the management in a variety of ways, in order to meet their own goals, that are not necessarily in YOUR best interests as an investor. At issuee are performance metrics such as short- and long-term performance above peers, marketing to potential investors to grow AUM based on past performance, and avoiding massive redemptions when the market gets sour. A lot of research is being published that discusses the pros and cons of mutual funds vs. ETFs. Here are a couple of examples of the issues: Quarterly "window dressing" - buying or selling certain assets so that the q/q performance appears to be in line with expectations Unbalanced allocation - Loading up on particular assets to take advantage of dividend payouts or market timing Overhead fees - decreasing present fees for the appearance of efficiency, only to...
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