SubscribeMutual Fund Companies are Doomed….
October 24, 2008
Here are charts from the largest and most respected mutual fund companies that are publically traded. It seems to us that even as many of these are breaking new lows that there are more problems and a potential for an additional downward move.
Just think about what you have done with your funds lately…. Do you think that they are going to post decent profits over the next coming quarters?
(FYI: We are short a few of these in TDI Managed Growth Portfolio)
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9 Responses to “Mutual Fund Companies are Doomed….”
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Give me an ETF that has tradeable options anyday!
[...] Mutual fund companies are doomed (most investors don’t realize that even their balanced funds are down 30%+ this year LOL) [...]
[...] You are not alone when you look at your portfolio of funds and wonder what happened. Investors are pulling money out of all types of funds at a record pace and mutual fund companies such as Legg Mason, T. Rowe Price Group, Janus, Alliance Bernstein and Franklin Resources are struggling and will continue to struggle on many different levels. As investors have been withdrawing funds due to their dissatisfaction with performance, even the fund company’s highest profit margins from money market funds has come under fire. In addition, competition in the form of low cost ETFs is also gaining strength as investors are looking for alternatives. (See “Mutual Fund Companies are Doomed” here) [...]
I worked at a mutual fund company for a few years, and here are a few quotes from fund managers I worked with:
“I’ve never used options, and I never will” — this was the response when I recommended the buying of puts, and covered calls to help protect investor accounts as the market begin to tank in late 2007.
“It’s only money, and it’s not even ours!” — overhead two fund managers joking around about how much money their funds were losing, this is what one of them actually said.
now we understand why hedge funds are doing much better than mutual funds — hedge funds actually understand that stocks go down, not just up.
Are you yelling FIRE in a crowded theater?
I would expect an article of this tone will only serve to worsen the status of mutual fund companies.
Sometimes the best action is no action, i.e. keep your mouth closed!
[...] You are not alone when you look at your portfolio of funds and wonder what happened. Investors are pulling money out of all types of funds at a record pace and mutual fund companies such as Legg Mason, T. Rowe Price Group, Janus, Alliance Bernstein and Franklin Resources are struggling and will continue to struggle on many different levels. As investors have been withdrawing funds due to their dissatisfaction with performance, even the fund company’s highest profit margins from money market funds has come under fire. In addition, competition in the form of low cost ETFs is also gaining strength as investors are looking for alternatives. (See “Mutual Fund Companies are Doomed” here) [...]
[...] Mutual Fund companies are in peril Mutual Fund companies and their performance [...]
[...] No Comments It all started when one of AltaPacific’s founders became frustrated with the performance of his mutual funds being managed by his financial planner. We’re not here to be critical of financial [...]
In response to Bill Flick:
“Are you yelling FIRE in a crowded theater?
I would expect an article of this tone will only serve to worsen the status of mutual fund companies.
Sometimes the best action is no action, i.e. keep your mouth closed!”
Bill,
Are you suggesting that we just sit back and turn our heads and say nothing? Sure there is a feedback loop, but telling someone not to speak their mind? We need more transparency not opacity. You might as well say shhhhhhh don’t tell anyone the milk is sour. They will eventually figure it out.
-T