`It is a rule of universal application that no one having [fiduciary] duties to discharge shall be allowed to enter into engagements in which he has or can have a personal interest conflicting or which possibly may conflict with interests of those to whom he is bound to protect. Thus, the trustee or the manager is under a duty not to place itself in a position where there is an actual conflict of interests or where such conflict may potentially exist.
It follows from this general rule that a trustee or a manager must not enter into ’self-dealing’ transactions.” Except where market usage permits, the courts have never permitted a fiduciary, in the course of the same transaction, to approbate and reprobate on its undertaking by acting as a fiduciary on the one side, and as an undisclosed principal in its private capacity on the other. Read the rest of this entry »
The power is to direct the investment of the capital in such investments as the testatrix’s son may from time to time direct. Upon the language of the power as a whole, in my judgment, provided he acts in good faith, [the son] is entitled to give directions to the trustees to realise any investments constituting the trust fund which they from time to time may hold. In my judgment, upon the language of the clause, the trustees are bound to comply with those directions save that they are to satisfy themselves, the shares not being shares in which there is a free and open market, that the price which they pay for them is a reasonable and proper price at the time they make the purchase. Read the rest of this entry »
In addition, the composition of equity funds changed during the 1990-2000 period. According to Strategic Insight, broader investment objectives such as growth and growth & income experienced a decrease of 7.7 percentage points in share of equity funds during the decade. The decrease was offset by an increase in more specialized funds, with higher management fees, such as sector funds and international funds. In particular, emerging market and country funds went from a half-percent share of funds 110P available in 1990 to almost 3% in 2000. At the same time, there was a substantial increase in lower management fee products such as index funds, which were almost nonexistent in 1989.
2. Number of funds During the 1990s, fund choices grew alongside assets at a rapid pace as the number of mutual funds increased from around 3,000 to over 8,000.
Implications of this tremendous increase in the number of funds for management fees depend on the resulting trends in average and median fund size, as shown in Table 2 (which defines a fund to include each class of a multi-class fund). Read the rest of this entry »
Shares in mutual funds can be sold directly by the fund or by its management company to investors, or through agents employed by the fund or management company as sales agents or representatives in a sales force. Managers may also sell funds through independent intermediaries acting either as agents for their clients or simply as selling agents who employ consultants to provide advice and support but selling directly to the public.
In the US, mutual funds typically sell their shares through a separate organisation known as a principal underwriter or distributor, and only in a few instances will the fund sell its own shares. The independent intermediaries are usually firms set up as broker-dealers. Read the rest of this entry »
