Tuesday, December 16, 2008

Funds Performance

Many investors prefer to choose a mutual fund because of its past performance record. The sponsor of the mutual fund tries to highlight the best times and results during the past years, which are precisely selected. They also glorify those investment manages who had the best results for some particular period. They focus on their victories and avoid talking about their slow times and losses. That is why this information is not very helpful, it is flawed. Investors should first pay attention to the principal characteristics of the fund and only then evaluate its past performance records.
You have to ask many question, to protect your money put into the investment market. According to many laws and regulations, all investors are to have access to some key info about an investment before they put the money in it. And that is why companies should disclose these facts and offer some basic knowledge to investors.
To make your investment fruitful, you have to be careful and educated. First of all, you have to learn the financial information about the company you are going to deal with. The most important facts that you have to check are different periodic reports, registration statement, and prospectus. This is all that the company has to disclose according to the Investment Company Act. You have to search for your own methods that will work the best on you and your investments.
Adequate information should be available to any prospective investor. And this information that is disclosed in a form of a document is called prospectus. A prospectus is a document that should contain the following information: the name of the fund, information about the investments of the fund, annual and semi-annual reports to shareholders should be available upon request. The prospectus should also include investment objectives and goals and risk and return summary.
Investment companies specify their investment policy in their prospectuses. An investment manager has a broad latitude in where to invest the assets of the fund. Investment adviser is a very important person who takes almost all control over your money. That is why it is also essential to learn more about your money manager.
And then, on the basis of all this information, you can make a decision of whether to purchase the shares or not. And it should be a balanced and objective decision.

Wednesday, December 3, 2008

Mutual Fund Reputation

After this the reputation of mutual funds was contaminated.
In 2004, Invesco Funds Group was accused of being involved in securities fraud and improper trading. The founder of the company, Richard S. Strong was trading in and out for his own profit. Invesco Funds Group joined a group of investment companies sued by NY Attorney General for improper trading. The most outstanding detail of tha scandal is that Mr. Strong was said to be worth $800 million and three fourths of that were earned from the improper trading.
In 2004, well known Marsh and McLennan company was accused of price fixing, bid rigging, the use of hidden incentive fees and collusion. It settled the case paying $850 million to policyholders hurt by. Marsh and McLennan issued a public apology and even called its conduct illegal and shameful. This company is one of the largest insurers in the United States and the image of this company was tarnished in the scandal.
In 2006, there was a law suit filed against BMA Ventures, Inc. This company is a registrered investment adviser and it was accused of issuing newsletters advising that the recipients put their money in the stock of some companies. All of those stocks were penny stocks. These newsletters were fraudulent and the company was secretly selling its stock in the same companies contrary to its recommendations. This fraudulent tactics is known as a scalping scheme. This fraud resulted into astronomical profits for BMA Ventures. The company violated the anti-fraud provisions of the a number of laws and the Investment Advisers Act of 1940. The U.S. Securities and Exchange Commission applied permanent injunctions against BMA Ventures and civil monetary penalties.

Mutual Funds Scandals

Mutual Funds Scandals. Almost half of all American families own shares in mutual funds. People very often put their money in mutual funds in IRAs or company pensions. However, during the past five years there have been so many mutual funds scandals spread, that a lot of investors started to think about withdrawal of their money. A lot of the leading investment companies have been involved in the wildfire. Nevertheless, the very largest investment companies such as the Vanguard Group and American Funds, had no relation to those scandals. Most of the scandals were focused on two problems: late trading and market timing. And the fraudulent companies were making money, while the investors were losing it. Almost twenty companies have been involved in those scandals and in fraudulent business tactics. The most notorious of those cases was the late trading scandal in which Canary Capital Partners LLC was involved. The company was accused of late trading that violates a number of laws and regulations. Canary Capital Partners LLC in collusion with many well-known mutual funds bilked investors: the company sold mutual fund shares when the market was officially closed at the price of the past day and could use all the necessary information they learned during the day. In such a way Canary Capital Partners and its partners could make huge profits that resulted in huge losses for shareholders. As a result of this situation, a number of nation known mutual fund companies had to pay fines and penalties to return to investors there money. And Canary Capital settled the case paying $40 million.

Wednesday, November 5, 2008

Popular investments

The formula of the popularity of mutual funds looks like this: time plus rate of return.
Investment manager directs the investments of the fund according to the objective of the funds. This objective could be: long-term progress, high ongoing income, and stability of course.
There are a lot of benefits of mutual funds. The most popular feature of mutual funds is their variousness. Mutual funds can invest in anything. They can hold securities from a variety of issuers. That enables investors to put their money into the securities of hundreds of issuers and reduce the risk of losing the money. Besides, mutual funds are professionally managed and they offer high liquidity, which means an easy access to the money.
Moreover, it is very convenient to invest in mutual funds. You can easily purchase shares online and sell them by telephone. And it is very easy to keep records of what happens to your investment.

Thursday, October 23, 2008

Mutual Funds

Investing is a very complex and interesting process. Bonds or securities, real estate, film industry or gold – you can lose or gain, the rest is history. It can be worhwhile and successful, but there are no guarantees that you will get your money back doubled and that securities will not lose their value. However, people have a lot of different means of how to control this process. Presently, mutual fund industry of the United States is the largest one in the world. There are various kinds of investments and all of them have different levels of risk and rates of interests. People usually differentiate between low-risk investments, mid-risk investments and high-risk investments. Mutual funds are for a long time considered to be low-risk investments. The popularity of mutual funds is increasing because they are replacing traditional savings instruments that include bank and trust deposits. Presently, mutual funds are even more popular than direct investment in stocks and bonds.

Wednesday, August 6, 2008

Hedge Fund Profitability

Hedge funds are typically open-ended, in that the fund will periodically issue additional partnership interests or shares directly to new investors, the price of each being the net asset value (“NAV”) per interest/share. To profit from the investment, the investor will redeem the interests or shares at the NAV per interest/share prevailing at that time. Therefore, if the value of the underlying investments has increased (and the NAV per interest/share has therefore also increased) then the investor will receive a larger sum on redemption than he paid on investment. Investors do not typically trade shares among themselves and hedge funds do not typically distribute profits to investors before redemption.

Sunday, August 3, 2008

Hedge Fund Administrtaion

A lot has been made of hedge fund managers but while they are often the public face of a hedge fund, they are hardly the only people involved in its success or failure. Hedge fund administrators play a vital role in maintaining a fund. Administrators don’t manage portfolios, trade or research, develop products, raise capital, or manage client relationships. Instead, they services clients and investors, support a fund from an operational end, and provide financial, tax and compliance reporting. This includes audits and tax coordination; compliance services such as anti-money laundering and background checks on clients as required by the Patriot Act. These functions are critical to the successful daily operation a fund and investment adviser.