MFO Now on Twitter

We are now on Twitter.

http://twitter.com/mutualfundopt MutualFundOpt

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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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The 2010 Earthquake of Haiti

!!! PLEASE HELP VICTIMS OF THE MASSIVE JANUARY 12, 2010 EARTHQUAKE IN HAITI !!! Please Donate Now http://www.unicef.org/ http://www.care.org/ http://www.doctorswithoutborders.org/ http://www.redcross.org/ And many other organizations here … http://www.google.com/relief/haitiearthquake/ For more information see the U.S. Department of State Official Blog http://blogs.state.gov/ God Bless, David Kuketz
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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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