Who consults the REAL investors?

Representatives of the Asset Management Industry demand that European Union regulators increase engagement with asset managers with them in order to better take into consideration their concerns when legislating for regulatory changes. The forgotten party, however, are the real investors in mutual funds and pension funds, i.e. the ordinary individuals who supply the savings that are managed by the fund management industry. It is high time that appropriate associations are developed that can speak with authority for the interests of the wider public.
11/10/2010 

Fund Management Industry: whose interests does it protect?

A recent squabble between asset managers in France illustrates that the fund management industry sometimes seems to forget whose interests it should primarily serve. The debate relates to the decision by AFG, the French fund management trade body, to allow foreign managers to join the association as 'second-tier' members. The established foreign member firms were always encouraged, even compelled, to operate costly local teams before they were allowed to join as full members. This overt form of protectionism made it difficult for non-accredited foreign fund managers to penetrate the French market to any meaningful degree.
But rather than fight among themselves the industry should be united in condemning protectionist policies as they ultimately lead to higher costs for the investors. (14/07/2010)

Patent on Investment Methodololgy

News that Research Affiliates has been granted a US patent for an indexing methodology that selects and weights securities using fundamental measures of company size, such as dividends and sales should set alarm bells ringing in investor circles the world over. While the ruling only affects the United States there is the danger that US law gains ex-territorial reach or gets copied by other legislatures.Granting a patent on an investment methodology is akin to granting a patent to the first person that has opened a self-service supermarket. It is nonsense and makes a mockery of the true purpose of patent protection for technological and medical innovations. Fees charged by Research Affiliates are a extra drag on investment returns achieved by investor's funds. We hope that fund providers have enough intelligence to do their own index construction. This work requires only minimal skill and can be performed on any standard PC.