Higher Education

The Mutual Fund Business, 1st Edition

  • Robert C. Pozen
  • ISBN-10: 0618166106  |  ISBN-13: 9780618166107
  • 608 Pages
  • © 2002 | Published
  • College Bookstore Wholesale Price = $166.50



Pozen, a leading industry expert, offers a structured presentation of mutual funds for upper-level undergraduates and MBA students. The Mutual Fund Business, 2/e, covers the key principles of mutual fund investment theory through straightforward writing supported by selected articles and case studies. This text provides a comprehensive, firsthand look at the investment strategies supporting a $4 trillion industry undergoing significant growth in the U.S.

Table of Contents

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
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

Meet the Author

Author Bio

Robert C. Pozen

Bob Pozen is President and CEO of Fidelity Management, the largest Mutual Fund company in the business. A well-known and well-respected Mutual Fund executive for many years, he brings his expertise about the industry to this text.