The Challenges of Declining Fund Assets: The Independent Directors’ Responsibility at Contract Renewal

Sara YerkeyFund Directors, Mutual FundsLeave a Comment

Mutual funds with steadily increasing assets are generally positive indicators for fund directors and shareholders alike. However, declining assets in a fund are just as likely. The purpose of this article is to highlight some of a fund director’s responsibilities, particularly in the contract renewal process, when the asset base is shrinking. The first order of business for the fund … Read More

A Survey of Fund Board and Director Assessments

Meyrick PayneFund Directors, Mutual FundsLeave a Comment

By C. Meyrick Payne of Management Practice Inc. (MPI), based on a workshop and related survey at the Mutual Funds Directors Forum Policy Conference held in Washington, DC. The Mutual Fund Directors Forum recently sponsored a session regarding fund board and director self-assessments, which was moderated by MPI. Approximately 100 mutual fund directors, counsel and those who support fund governance … Read More

Setting Fund Director Compensation: Measuring the “Degree of Difficulty”

Jay KeeshanCompensation, Mutual FundsLeave a Comment

Our last bulletin discussed the many changes that fund directors have experienced in their duties over the past decade. The job has undoubtedly become more difficult, as has the task of setting their compensation each year. It is important that, given the responsibilities,pay be set in a way that is fair to directors, but equally important is that the fee … Read More

Mutual Fund Profitability in 2016: Gartenberg Benchmarks

Meyrick PayneMutual FundsLeave a Comment

Range of Pre-Tax Profit as a percentage of Investment Revenue 2005 - 2016

Perhaps the most important function served by mutual fund directors is the annual review of investment management arrangements. One factor in this review is the assessment of the investment manager’s profitability. Each year MPI conducts a survey of profitability of publicly-owned investment management companies which provides independent directors a quantitative benchmark to assist in their discussions regarding the reasonableness of … Read More

The Fund Director Search Process

Meyrick PayneMutual Funds, Search FirmsLeave a Comment

By: C. Meyrick Payne and Sara D. Yerkey, partners at Management Practice Inc. In this bulletin MPI presents the process they typically follow to complete a search for new trustees/directors of mutual funds. In the past two years Management Practice has successfully filled five fund director positions. We have found that the secret to starting a successful fund trustee search … Read More

Trust, Blockchain and Cryptocurrencies for Fund Directors

Sara YerkeyMutual FundsLeave a Comment

The relevance of blockchain and cryptocurrencies to the mutual fund industry can be easily understood once the similarities are recognized between the “trust technology” of 1940 Act mutual funds and that of cryptocurrencies. Just like law or technology degrees aren’t needed for trust in today’s mutual funds, you don’t need a mathematics degree to trust cryptocurrencies. The technical jargon surrounding … Read More

Customizing 15(c) Practices and Materials for Today’s Fund Offerings

Sara YerkeyMutual FundsLeave a Comment

Few would dispute that the investment management industry has witnessed transformational changes in the past decade…both the Commission and investors should have access to more substantive… information about funds and their advisers. David W. Grim, SEC Director of the Division of Investment Management, March 2016 When Section 15(c) of the Investment Company Act of 1940 was written, there were no … Read More

The Looming Retirement Crisis: Retirement Investors are Overpaying for Liquidity

Sara YerkeyMutual Funds, RetirementLeave a Comment

America’s workers face a massive challenge as they save for retirement. A guaranteed monthly check that they (and their spouse) can depend upon for the rest of their lives is not an option with most pension plans. Direct contribution plans give more control to investors, but in the end these plans are largely failing them. Several industry estimates put the … Read More

Defending Against Arbitrage Attacks on Closed-End Funds

Meyrick PayneMutual FundsLeave a Comment

Closed-end funds are often formed because they offer investors an opportunity to invest in a focused portfolio which meets their specific needs, usually with built-in leverage, potentially higher returns, and tax advantages. Often the investment focus of the fund is fashionable at the time it is launched. Theoretically the investor can get their money out by selling shares to another … Read More

Fund Board Service: Age, Term or No Limits

Sara YerkeyFund DirectorsLeave a Comment

Being a mutual fund director is a uniquely influential position and it can be quite rewarding, both psychologically as well as monetarily. Once someone has become one there are few mechanisms by which he or she can be displaced. The purpose of this MPI Bulletin is to explore the advantages and disadvantages of placing age, term, or no limits on … Read More