Mutual Fund Supply Chain Optimization

We're going to build upon our ideas that the financial industry is a supply chain and information and value flow in both directions, inbound and outbound. See our Mutual Fund Industry Supply Chain Model post.

The greatest point of value creation is at the portfolio construction stage (creating and maintaining that list).

Preservation of that value (capital) must be supported across the supply chain.

Propagation of that value can be diluted when repackaging occurs, that is, when mutual fund wholesalers and distributors (middle men) and financial advisors create bundles of mutual funds with other assets that change the expected returns, diversification, volatility and relative performance, while also adding on expenses and fees, directly charged against the capital.

Pervasive technology, proven processes, and experienced people, at all stages assures value, preservation and risk control, or at least, it should.

Because of time periods and variability, regeneration (maintenance) must occur, to keep the list performing at the optimal level, given the mutual fund's charter and market conditions.

Preservation and propagation governance over time is a must - this requires vigilance and skillful decision-making, in a timely manner.

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