Challenges for Mutual Fund Managers


Figure 1 (click to enlarge)

Now, we have defined mutual funds as digital assets that can be distributed thru a virtual network, from source where the value is created and managed, to the retail investors where payment of fees is made (plus information about self is granted) in exchange for that created / perceived value, via the wholesalers, distributors, financial advisors and institutional investing networks.

But not all is simple, mutual fund managers must navigate a stormy sea of:

• Redemptions (clients departing)

• Performance (NAV decreasing, Cap gains & Dividends decreasing)

• Risk (volatility increasing)

• Asset Allocation (what’s the right mix?)

• Modeling (efficient frontier “what ifs”)

• Competition (perception of better & best)


• Disintermediation / Transparency?

• Reputation (least worst performing?)

• Future?


- How will they perform relative to their peers and other assets such as Hedge Funds and ETFs (Exchange Traded Funds)?

– Independent scoring of “Diversification”, Relative Performance, Volatility, Risk vs. other funds and fund families?

An organization could be created that tracks mutual funds and their managers, provisioning this information as a valuable resource for the middle men and retail investors, so more educated, aware and informed investment decisions can be made!

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