Co-authored with Theresa Hamacher.
Risk matters as much as return in any mutual fund investment, but assessing the risk of a specific mutual fund can be a challenge. Even though mutual funds have become increasingly complex, their risk disclosure was designed for a simpler era, when funds used only traditional investment strategies.
New leadership is coming to the Securities and Exchange Commission with the nomination of Mary Jo White as SEC chairman.
So it seemed just the right time to ask mutual-fund and investing experts: What do you think officials in Washington could do to help mutual-fund investors the most?
The investment management world used to be simple. Mutual fund managers sold stock and bond investments to the general public subject to stringent regulation, while unregulated hedge fund managers served only the very wealthy with much riskier investment strategies.
In this economy, a college education is more important than ever: The unemployment rate for college graduates is 3.8 percent, compared to 7.8 percent for everyone else. Yet, the exploding costs of education are causing some students to graduate with heavy debt burdens.
Co-authored with Theresa Hamacher.
Since the financial crisis of 2008, money market funds have been the subject of fierce debate. Regulators say money market funds need to be fundamentally transformed to prevent them from creating too much systemic risk. The fund industry has pushed back, trying to preserve the utility of money market funds for millions of investors. Fortunately, a smart compromise exists that would reform the riskiest money market funds while protecting retail investors.
The road to money market fund reform has been politically arduous. In August, Mary Schapiro, then the Chairwoman of the SEC, was forced to call off a vote on money market fund reform. Three of the five commissioners had indicated that they were not prepared to support the rules under consideration. Fortunately, two of the three dissenters have recently expressed receptivity to some reforms in certain circumstances.