CHFundManagemen金融市场学,上海大学,悉尼大学

FundManagement6ChapterObjectivesExplaintheconceptofmutualfundoperationExplainvarioustypesofmutualfundsDescribethevarioustypesofstockandbondmutualfundsDescribethecharacteristicsofmoneymarketfundsBackgroundonMutualFundsMutualfundsofferawayforsmallinvestorstodiversifywhentheycouldnotdosoontheirownwiththepurchasesofindividualstocksComparisontodepositoryinstitutionsLikedepositoryinstitutions,mutualfundsrepackageproceedsfromindividualstomakeinvestmentsBankdepositsarealiabilitycontract,butamutualfundrepresentspartialownershipNofederalinsurancewithmutualfundsharesBackgroundonMutualFundsMutualfundsadheretoavarietyoffederalandstateregulationsSecuritiesandExchangeCommission(SEC)regulatesFundsmustregisterandprovideaprospectustoinvestorsDisclosuresince1993ofmanager’snameandlengthoftimeemployedinthatpositionMutualfunditselfisexemptfromincometaxationiffunddistributes90percentoftaxableincomeBackgroundonMutualFundsMutualfundprospectusinformationincludes:TheminimumamountofinvestmentrequiredTheinvestmentobjectiveofthefundThereturnonthefundoverthepastyear,thepastthreeyearsandthethepastfiveyearsTheexposureofthefundtovarioustypesofriskServicesthefundoffersCheckwritingTelephoneorInternetfundstransferManagementfeesincurredthatinvestorspayBackgroundonMutualFundsEstimatingthenetassetvalueNetassetvalueisthevaluepershareEstimateddailyDeterminethemarketvalueofallthesecuritiesinthefundAnyinterestordividendsaddedinExpensessubtractedDividebythenumberofsharesDividendslowerNAVNAVquotesMutualFundDistributionsMutualFundPriceAppreciationCapitalGainsfromtheSaleofSecuritiesinFundEarnedIncomefromDividendsorCouponPaymentsBackgroundonMutualFundsMutualfundclassificationsdependonthetypeofsecuritiesthefundinvestsinandcanincludeStockorequitymutualfundsBondmutualfundsMoneymarketmutualfundsFamilyoffundsofferedbyinvestmentcompaniesInvestorabletoallocatethentransferfundsamongfundsExhibit24.2DistributionofInvestmentinMutualFundsStock

Funds$3,962

billion57%Bond

Funds$808

billion11%Hybrid

Funds$349

billion5%MoneyMarket

Funds$1,845

billion27%BackgroundonMutualFundsManagementofmutualfundsManagersinvestinaportfolioofsecuritiestomeettheobjectivesofthefundCovermanagementcostswithfeeswhicharetypicallyaroundonepercentoftotalassetsperyearManagersadjustthecompositionoftheirportfoliosinresponsetomarketandeconomicconditionsBackgroundonMutualFundsExpensesFeesincludemanagementplusrecord-keepingandclericalfeesExpenseratio=annualexpenses/fundNAVPassedontoinvestorssinceNAVisreducedbyfeesInvestorshouldcompareexpenseratiosActivemarketingexpensesandcompensationincreasesexpenses—12b-1expensesBackgroundonMutualFundsCorporatecontrolbymutualfundsMutualfundsarelargeshareholdersincompanieswhosestocktheyholdManagersmayserveontheboardofdirectorsofcompaniesinwhichthefundinvestsCompaniestrytosatisfymutualfundmanagersinordertokeepthemfromsellingtheirstakeinthefirmLoadversusNo-LoadMutualFundsClassificationreferstowhetherornotthereisasaleschargeNo-loadmeansfundsarepromoted,boughtandsolddirectlyviathemutualfundLoadfundsPromotedbyregisteredrepresentativesofbrokeragefirmswhogetacommissionInvestorspaythesalescharge12b-1expensesare“loads””usedbyno-loadfundsOpen-EndversusClosed-EndFundsClosed-endfundsMutualfunddoesnotrepurchasethesharestheysell—similartodirectcommonstockinvestmentInvestorsmustsellsharesonanexchangeNumberofoutstandingsharesisconstantValueofsharesrelatedtoexpectationsofportfolioanddeterminedinmarketOpen-end“mutual”fundsWillingtorepurchaseinvestorsharesatanytimeNumberofsharesoutstandingdoesnotremainconstantNAVdeterminedbyfunddailyStockMutualFundCategoriesGrowthfundsforinvestorswhowanthighreturnswithmoderateriskMutualfundinvestsincompaniesthatareexpectedtogrowatahigherthanaveragerateGenerateanincreaseininvestmentvalueratherthansteadyincomeCapitalappreciationoraggressivegrowthfundsHighbutunprovengrowthpotentialstocksHigherriskStockMutualFundCategoriesGrowthandincomefundstrytooffergrowthbutwithsomestabilityofincomeInternationalandglobalfundsallowinvestmentinforeignsecuritieswithoutthecostsinvolvedinpurchasingandmonitoringindividualstocksReturnsaffectedbystockpricesReturnsalsoaffectedbyforeignexchangeratesAglobalmutualfundinvestsinsomeU.S.stocksStockMutualFundCategoriesInternetfundsfocusoninvestmentsinInternetcompaniesSpecialtyfundsfocusonagroupofcompaniessharingaparticularcharacteristicIndexfundsaredesignedtosimplymatchtheperformanceofanexistingstockindexMultifundfundsinvestinaportfolioofdifferentmutualfundsMorediversifiedInvolveshigherexpensesExhibit24.3GrowthinNumberofEquityandBondFundsYear010002000300040005000600070008000BondFundsStockFunds200119991995199019851978Exhibit24.4InvestmentinBondandStockMutualFundsYear010002000300040005000BondFundsStockFunds2000199919981997199619951994199319921991199019891988198719861985Exhibit24.5DistributionofAggregateMutualFundAssetsCommon

Stock$3,882

Billion76%Municipal

Bond$269

Billion5%Long-Term

U.S.

Gov’t$309

Billion6%Cash$277

Billion5%Corporate

Bonds$349

Billion7%Preferred

Stock$28

Billion1%BondFundInvestmentObjectivesRisksofbondfundsInterestrateriskCreditriskTaximplicationsofbondfundinvestmentsIncomebondfundsvaryintermstheirexposuretocreditriskandfocusonperiodiccouponpaymentsandattractinvestorswhoareInterestedinperiodicincomesincepricesarevolatilePlantoholdthefundlongtermBondFundInvestmentObjectivesTax-freefundsforhightaxbracketinvestorsHigh-yieldorjunkbondfundsinvestinbondswithahighriskofdefaultInternationalandglobalbondfundsInternationalbondfundscontainbondsissuedbygovernmentsorcorporationsfromothercountriesGlobalfundsmaycontainbothU.S.andforeignbondsBondFundInvestmentObjectivesMaturityclassificationsInterestratesensitivitydependsonthematurityofbondsFundsaretypicallysegmentedbasedonmaturityIntermediate-termfundsinvestinbondswith5to10yearsremainingtomaturityLong-termfundsinvestinmaturitiesof15to30yearsBondFundInvestmentObjectivesAssetallocationfundsFundsthatcontainavarietyofinvestmentsCompositionamongstocks,bondsandmoneymarketsecuritiesisbasedonmanager’sexpectationsGrowthandSizeofMutualFundsVolumeandmixinthekindoffundsvariesovertimeOverallinvestmentviamutualfundsmuchhigherinrecentyearsNewkindsoffundstargetcustomerswithdifferentriskpreferencesPerformanceofStockMutualFundsBothinvestorsandmanagerscloselymonitorperformanceasmodeledbytheequationbelowPERF=PerformanceSECTOR=Conditionsinthefund’ssectorWhere:PERF=f(MKT,SECTOR,MANAB)MKT=GeneralstockmarketconditionsMANAB=Theabilityofthefund’smanagementPerformanceofStockMutualFundsChangeinmarketconditionsCloserelationshipbetweenperformanceandmarketconditionsChangeinsectorconditionsDependsonthefocusofthefundIndexfundsAsianfundsChangeinmanagementabilityincludesbothmanagers’’skillsandoperatingefficiencyPerformanceofStockMutualFundsPerformanceofclosed-endstockfundsDrivenbythesamefactorsthatinfluenceopen-endedfundsFixedsupplyofthefund’’ssharesAdditionalissuesPerformanceisaffectedbychangesinthepremiumordiscountrelativetoNAVIfthefund’spremiumincreasesrelativetoNAV,returntofundholdersincreasesPerformanceofBondMutualFundsPerformanceofbondmutualfundsasshowninthemodelbelowPERF=f(Rf,RP,CLASS,MANAB)PERF=PerformanceRP=RiskpremiumWhere:Rf=RiskfreeinterestratesCLASS=theclassificationofthebondfundMANAB=Theabilityofthebondfund’’smanagementPerformanceofBondMutualFundsChangeintheriskfreerateBondpricesareinverselyrelatedtotherisk-freerateWhenratesdecline,mostbondfundsperformwellChangeintheriskpremiumIfrequiredriskpremiumsincrease,bondpricesfallLinkedtoeconomiccondition:RiskpremiumsincreaseinrecessionsRiskpremiumsdecreaseinboomtimesasinvestorsbuyriskierinvestmentsPerformanceofBondMutualFundsImpactofthebondfund’sclassificationSomefundstargetaspecificriskormaturityClassificationmayhavemoreimpactthananyotherfactorChangeinmanagementabilitiesPerformanceofclosed-endbondfundsisaffectedbyalloftheotherfactorsandchangesinthepremiumordiscountPerformanceofMutualFundsInvestorsshoulddiversifyamongdifferentkindsoffundstoreducevolatilityResearchonstockmutualfundperformanceUsingreturnonlyisnotvalidMutualfundstypicallydonotoutperformthemarketEvaluatemutualfundexpensesResearchonbondmutualfundsBondmutualfundsunderperformbondindexesInvestorsshouldlookforlowexpensebondfundsMoneyMarketFundsMoneymarketfundsareportfoliosofshort-termassetsCanincludecheck-writingprivilegesforinvestorsNumberofcheckspermonthmayberestrictedShareholdersgetperiodicstatementsLiquid,“cash”balanceforinvestorMoneyMarketFundsAssetcompositionofmoneymarketfundsIndividualfundsconcentrateinassetsthatreflectthefund’’sobjectiveMoneymarketsecuritiesofvaryingmaturityMaturityofmoneymarketfundsVariesovertimewithmarketconditonsRiskincreaseswithtermExhibit24.7CompositionofMoneyMarketFundAssetsU.S.

TreasurySecurities$91

billion6%Other$303

billion20%Commercial

Paper$620

billion41%CDs$123

billion8%RepurchaseAgreements$186

billion12%Other

U.S.

Securities$189

billion13%MoneyMarketFundsRiskofmoneymarketfundsCreditriskminimizedbytheshort-termnatureofmaturitiesReturnsformoneymarketfundsfallasinterestratesintheeconomyfallExpectedreturnsarelowrelativetostockandbondfundsConsistentpositivereturnsovertimeLowercreditriskLowerinterestrateriskMoneyMarketFundsManagementofmoneymarketfundsManagerstrytomaintaintheoverallobjectiveofthefundManagethecompositionoftheassetsInvestorshaveavarietyofchoiceswhenitcomestomoneymarketfundsMoneyMarketFundsRegulationofmoneymarketfundsSecuritiesActof1933requiresthatfundsprovidefullinformationtoinvestorsviaaprospectusInvestmentCompanyActof1940containsrestrictionstopreventc