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.
I recently returned from a trip to Beijing, where I launched the Mandarin translation of a book that I co-authored with Theresa Hamacher entitled The Fund Industry: How Your Money is Managed.
The book was translated because the Chinese fund industry is expanding rapidly; Chinese mutual funds were introduced in 2001 yet held over $340bn in assets by the end of 2011.
What is the critical factor for success in the U.S. mutual fund industry? Is it top-ranked investment performance, innovative products, or pervasive distribution? In our view, it is none of these factors, despite their obvious importance. Instead, the best predictors of success in the U.S. fund business are the focus and organization of the fund sponsor. We believe that the most successful managers over the next decade will be organizations with two characteristics: dedication primarily to asset management and control by investment professionals.
It is amazing how little many of us really know about our mutual funds.
We may have a handle on the investments they hold — large-cap stocks or bonds or whatever — and some understanding of how they work: our money is pooled with a lot of other people’s, and we share the gains and losses proportionately. Continue reading
The latest book from Bob Pozen.
Every investor, student of finance and participant in the mutual fund industry needs to read this book. The Fund Industry details how mutual funds are marketed, regulated, and invested in stocks and bonds. The book also describes the critical factors needed to choose a specific fund for your investment or retirement plan, including what to look for when reading prospectuses, shareholder reports and third party reviews.
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In 2009 more than 87 million Americans were invested in mutual funds, but it is unlikely that more than a handful outside of the industry had any idea how these funds work. Robert Pozen and Theresa Hamacher set out to educate the investor in The Fund Industry: How Your Money Is Managed (Wiley, 2011). The education is thorough, clear and enjoyable. I highly recommend it.
Robert Pozen, chairman emeritus of MFS Investment Management, discusses his 2011 book “The Fund Industry: How Your Money is Managed” with Bloomberg’s Pimm Fox and David Wilson. They spoke on Bloomberg Radio’s “Taking Stock.”
Written by Robert Pozen and Theresa Hamacher, Fundamentals of the Fund Industry is the most in-depth and up-to-date guide to navigating the mutual fund industry, written in an accessible style with many examples and charts.The Fund Industry details how mutual funds are marketed, regulated, and invested in stocks and bonds. The book also describes the critical factors needed to choose a specific fund for your investment or retirement plan, including what to look for when reading prospectuses, shareholder reports and third party reviews. In addition, the book:
