Note: Each chapter contains Review Questions, Discussion Questions, and Notes. I. Structure, Measurement and Regulation of Mutual Funds 1. Indirect Investing Through Mutual Funds I. Mutual Funds versus Individual Securities II. Mutual Funds: History and Current Trends III. The Structural Characteristics of Mutual Funds and Commercial Banks Reading 1.1 Money Managers and Securities Research by Robert C. Pozen Reading 1.2 The End of Behavioral Finance by Richard Thaler Reading 1.3 Industry Profile: How the Commercial Banking Industry Operates Case Study: Analyzing Credit Issues in a Money Market Fund 2. Choosing Among Mutual Funds I. Types of Nonstock Funds II. Stock Funds III. Alternatives to Mutual Funds (Other Pooled Investment Vehicles) Exercise 2.1 Allocating Assets Among Mutual Funds 3. Regulation and Disclosure for Mutual Funds I. Classification and Taxation II. Disclosure and Advertising Rules Callout Box: Investment Company Institute III. Internet and Privacy Callout Box: Electronic Signatures IV. Substantive Regulation V. Independent Directors Callout Box: Advisory Group on Best Practices for Directors VI. Enforcement and Ethical Codes Callout Box: Blue Ribbon Advisory Group on Personal Investing Reading 3.1 Advertising the Fund by Kirkpatrick & Lockhart LLP Exercise 3.1 Designing a Short-Form Prospectus II. Portfolio Management and Equity Trading 4. Portfolio Management of Bonds I. Bonds: Tradable IOUs Callout Box: Information on High Yield Bonds Callout Box: Evolution of an Alternative Benchmark II. Managing a Bond Mutual Fund Callout Box: FINOVA: A Divergence Between Rating Agencies and the Market III. Roles of Investment Professionals Callout Box: Liquidity Risk of High Yield Municipal Bonds Callout Box: A Successful Call by a Credit Analyst Case Study: Trustworthy Municipal Bond Fund 5. Portfolio Management of Stocks I. Overview of Equity Securities II. Equity Research Callout Box: The "Head and Shoulders" Top in IBM: Technical Research in Action Callout Box: Trying to Differentiate Between Rumor and Fact Callout Box: When a Buy Is Not a Buy Callout Box: The Cost of an Earnings Miss Can Be High III. Portfolio Management Callout Box: the Role of Investor Sentiment Reading 5.1 Two Illustrative Approaches to Formula Valuations of Common Stocks by Benjamin Graham Case Study: Managing a Stock Fund 6. Brokerage Transactions for Mutual Funds I. Overview of U.S. Equity Markets II. Roles and Responsibilities of Mutual Fund Traders Callout Box: Shopping a Block: Conversation at a Fund Trading Desk III. Fiduciary Responsibilities of a Mutual Fund Trader and Oversight by the Fund Board Reading 6.1 The Buy Side Trading Desk (excerpt) by David Cushing Case Study: Executing a Block Trade III. Marketing and Servicing of Mutual Fund Shareholders 7. Marketing of Mutual Funds I. Intermediary Channel Callout Box: Merrill Lynch: Changing with the Times II. The Direct Channel Callout Box: Vanguard Funds: The Low-Cost King III. Cross Channel Trends Case Study: Evaluating Strategies for Fund Distribution 8. Retirement Plans and the Fund Business I. Structure of Tax-Qualified Retirement Plans Callout Box: 2001 Pension Legislation Callout Box: What Is ERISA? II. Role of Mutual Funds in 401(k) Plans Callout Box: Profile Prospectus III. Other Types of DC Plans Callout Box: TIAA-CREF and 403(b) Callout Box: Shift from DB to DC in the Governmental Plan Market IV. IRAs V. The Future of Retirement Plans Reading 8.1 Social Security: Basic Questions Answered by C. Eugene Steuerle Reading 8.2 Grounds for Compromise: Competing Reform Proposals Are Closer Than They appear by C. Eugene Steuerle and Adam Carasso Exercise 8.1 Designing an Investment Array for a 401(k) Plan 9. Servicing Fund Shareholders I. Functions of the Transfer Agent Callout Box: A Fund Redemption Through a Broker-Dealer Callout Box: Functions of the Pricing and Bookkeeping Agent Callout Box: Phone Representatives and a Typical Customer Inquiry II. Transfer Agents as an Industry III. Pricing and Service Quality Callout Box: Sample of Firms Measuring Mutual Fund Service Case Study: Controlling Hot Money IV. Financial, Governance and Global Implications of Mutual Funds 10. Financial Dynamics of Mutual Funds I. Expenses for Fund Investors II. The Debate on Management Fee Revenue Callout Box: Performance Fees as a Rarity III. Structure of Fund Industry IV. Mergers and Acquisitions Involving Fund Sponsors Supplemental Information: Summary of Transactions Involving Fund Managers Case Study: Balancing Interests in a Fund Merger 11. Mutual Funds as Institutional Investors I. The Increasing Importance of Mutual Funds as Stockholders II. Legal Framework III. Voting Policies and Practices of Mutual Funds IV. Institutional Activism and Mutual Funds Callout Box: The Battle for Control of Sallie Mae Callout Box: T. Rowe Price Opposition to Cort Deal V. Mutual Funds and Social Activism VI. Empirical Studies on Shareholder Activism VII. Corporate Governance Outside the United States Callout Box: The War of the Handbags Reading 11.1 TIAA-CREF's Executive Compensation Program Guidelines Reading 11.2 Institutional Investors: The Reluctant Activists by Robert C. Pozen Reading 11.3 Shareholder Activism and Corporate Governance in the United States (excerpt) by Bernard S. Black Case Study: Fund Voting in a Proxy Fight 12. Internationalization of Mutual Funds I. Overseas Investing by U.S. Mutual Funds Callout Box: Foreign Custody of Mutual Fund Assets Callout Box: Changes to International Indexes II. Cross-Border Asset Gathering Activities Callout Box: China Fund Market Callout Box: Mexico After NAFTA Case Study: Transferring a Fund Business to a Foreign Country
The Mutual Fund Businessby Robert C. Pozen, Sandra D. Crane, Sandra D. Crane
Pub. Date: 06/05/1998
Publisher: MIT Press
"This book brings an invaluably stimulating international perspective to the study of mutual funds. Through cases and other materials, it explores the various constraints on transferring successful practices in the mutual fund business from one country to another. It is essential reading for anyone deeply interested in global investing."
"This book brings an invaluably stimulating international perspective to the study of mutual funds. Through cases and other materials, it explores the various constraints on transferring successful practices in the mutual fund business from one country to another. It is essential reading for anyone deeply interested in global investing."In the last decade, the number of mutual funds has tripled to more than 6,000 funds with more than $4 trillion in assets and more than 60 million individual shareholders. Yet there is no book on the mutual fund business designed for MBA and undergraduate business courses. The Mutual Fund Business, assembled by a leading industry expert, fills this gap.
-- Jeffrey E. Garten, Dean, Yale School of Management
The book is divided into four parts. Part I contains a general introduction to mutual funds, a short history of the industry, and an overview of mutual fund regulation. Part II covers portfolio management of stock funds and bond funds, as well as execution of fund trades. Part III discusses the marketing and servicing of mutual funds in the direct, intermediary, and retirement channels. Finally, Part IV delves into more specialized topics: the financial dynamics of mutual funds, mutual funds as institutional investors, the role of technology in mutual fund complexes, and the internationalization of mutual funds.
Each chapter contains not only a lengthy introduction and selected articles, but also a detailed case study or class exercise. An extensive teacher's manual, with a complete set of lecture notes, slides (on diskette) to support the lectures, answers to the review questions for each chapter, and an analysis of each case study is available for instructors who adopt the book.
- MIT Press
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