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
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
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
The 2018 MPI Mutual Fund CCO Compensation Survey (Summary)
MPI recently completed its thirteenth annual Survey of Mutual Fund Chief Compliance Officer Compensation and Organizational Practices. This bulletin summarizes the findings and is based on the submissions of 66 mutual fund CCOs from all regions of the U.S., representing funds with $2.9 trillion in assets. This year’s study found that 64% of the participants were full-time employees and serve … Read More
Rules to Live by for Directors of Active Funds
Many fund directors are asking what they can do to help shareholders of active funds – a product 90% of directors oversee. These funds face one huge hurdle: they underperform and undersell passively managed funds. In 2016, $504 billion flowed into passive funds while $340 billion flowed out of actively managed funds, according to Morningstar Direct. Actively managed funds have … Read More
Why and How Directors Should Own Fund Shares
Most directors, whether they serve corporate or fund boards, agree that owning shares in the entity they govern is important. Ownership is tangible proof that the interests of the board are consistent with those of the shareholders they represent. This MPI Bulletin examines fund director share ownership policies but more importantly addresses how directors acquire those shares. Over many years … Read More
The Search for the “T” Shaped Fund Director
Based on MPI’s Annual Trustee Compensation and Governance Practices Survey, we believe that 25% of the sitting mutual fund board directors will retire or step aside due to fund mergers in the next five years. As a result, many Fund Boards will need to recruit new Trustees during this period. These Boards will go through the process of identifying gaps … Read More
What Fund Directors Need to Know about Robo Advisors
Robo Advisors (Robos) is a method of customized internet based financial advice. They can be simple, essentially an extension of the “model portfolios” financial planners have used for years to help tailor advice to investors to accommodate age, risk tolerance and objectives. Robos can also be complex, actually executing an asset allocation strategy for a client who has no or … Read More
2017 MPI Mutual Fund CCO Compensation Survey
MPI completed its twelfth annual Survey of Mutual Fund Chief Compliance Officer Compensation and Organizational Practices. This bulletin summarizes the findings and is based on the submissions of 60 mutual fund CCOs from all regions of the U.S., representing funds with $2.3 trillion in assets. This year’s study found that 65% of the participants were full-time employees and serve as … Read More
The 2017 MPI Annual Mutual Fund Director Compensation Survey
Management Practice Inc. (MPI) has just completed its 24th annual “Survey of Mutual Fund Director/Trustee Compensation and Governance Practices,” with data covering 1,982 directors from 410 fund boards. Full reports and specific board compensation comparisons are available from MPI. The average pay increase from 2015 to 2016 (for equivalent directors) was 5.2%, down from 5.9%, 7.5% and 7.2% over the … Read More