Assets Managed by Fund Managers - Research Paper Example

Fund Managers Various companies in united d offer registered fund services, at the year amongfund complex 75 % were independent fund advisers where these firms managed over 60% of investment company assets while the rest was being managed by non US fund managers, bank thrift ,insurance companies and brokerage firm among others (Ernst &Young) Number of Fund Managers in Us There has been decline in number of investment companies, primarily those offering fund management services, (McKinsey & company,). however the pace of newly opened firms is increasing for a second year in a row totalling to 580 fund managers in 2010 and 713 by 2011 though this is still below average compared to previous 10 years (McKinsey & company). Competitive dynamic has also affected numbers fund managers where merging and liquidation of funds occur o attract investors, however also the rate of fund liquidation and mergers have declined slightly from 494 in 2010 to 486 in 2011 (Blackstone group). With unit investment trust which are registered companies that posses both characteristics of mutual funds and closed-end funds, their presence is attributed to low number of investment companies below year 2000 level despite net increase since in 2005. The number of new UITs has increased by 2011 by opening 51 new trusts, while closed end fund sponsors had increased with 10 by 2011 since year2005 (Investment Company institute, p, 17). ETFs which are regarded as hybrid of other investment companies (Dow Jones& company) have continued to increase with significant speed where 216 new fund have been opened, on net, by 2011 there were 1,166 ETFs which is 15 times that existed at year 2000 ( Investment Company institute,p.19). Numbers of fund managers     Closed-end         Mutual funds1 funds ETFs2 UITs Total 1995 5,761 499 2 12,979 19,241 1996 6,293 496 19 11,764 18,572 1997 6,778 486 19 11,593 18,876 1998 a 491 29 10,966 18,975 1999 8,003 511 30 10,414 18,958 2000 8,370 481 80 10,072 19,003 2001 8,518 491 102 9,295 18,406 2002 8,511 544 113 8,303 17,471 2003 8,426 583 119 7,233 16,361 2004 8,415 618 152 6,499 15,684 2005 8,449 634 204 6,019 15,306 2006 8,721 646 359 5,907 15,633 2007 8,746 663 629 6,030 16,068 2008 8,880 642 743 5,984 16,249 2009 8,612 627 820 6,049 16,108 8,540 624 950 5,971 16,085 2011 8,684 634 1,166 6,022 16,506 Source:   Source: Investment Company,p.19 Assets Managed By Fund Managers United state represented the world largest of mutual fund market, at the end of 2010 i.e. 11.8 trillion under management which is 48 % of global mutual fund asset under management (Investment Company institute, p.14). US registered investment companies managed $13 trillion by the end of 2011 (investment company fact book, p. 8) while this figure represent is a decrease of $ 129 billion since 2010. This is attributed to 1 % stock index fall hence decrease in total of net asset of fund invested in domestic equity market. Also through lowering of US equity and bond fund that held international asset, resulted to decrease in dollar value of non domestic securities in their portfolios (Investment Company institute, p.34). Asset under Fund Managers Year Tax-free debt trust assets (left scale) Taxable debt trust assets (left scale) Equity trust assets (left scale) Total trust assets (left scale) 1992 81 10 6 98 1993 71 9 8 88 1994 a 7 9 74 1995 51 8 14 73 1996 41 8 23 72 1997 38 6 41 85 1998 32 5 56 94 1999 26 4 62 92 2000 23 4 48 74 2001 19 4 26 49 2002 17 4 15 36 2003 13 3 19 36 2004 11 3 23 37 2005 10 2 29 41 2006 9 2 39 50 2007 8 2 43 53 2008 6 2 20 29 2009 10 4 25 38 2010 13 4 34 51 2011 16 4 41 60 Source: Investment Company institute, p.34 Revenue Generated By Assets under Fund Managers Financial currency trading market is quite dynamic with which changes daily and keep evolving as technology keep changing the course of online trading (Jeulin). Income represented by divided distribution mainly is generated from interest and divided earned from securities in fund manager portfolio, in 2011 mutual fund distributed $208 billions where bond and money accounted for 56 percent of total divided which were paid to tax-exempt fund shareholder and tax differed house hold accounts and the other 38 % were paid to tax house hold account ( Investment Company institute,p.26), while mutual fund capital gain distribution which represent funds net gain , genera rated from sell of securities held in portfolio, in 2011 mutual fund distributed $ 73 billion in capital gain to its share holder,53% of the distribution were paid to tax-differed household account and the remaining 41% were distributed to taxable household account (Investment Company institute, p.28). Fund Managers Who Use Forex Trade to Increase Their Return Investment management firm who manage large account on behalf of their customers can use the forex trade to generate profit as well limiting the risk, this is done mainly through speculative specialist, however number of firms that participate in this trade is small and yet many firm have large asset under management which have potential to generate large trade (Norman). According to Watson, Where Forex trading in United State account for 17.9 % of total forex trade. It has been pin pointed that only few managers who have identified means or are wiling to outsource more than what they hold i.e. 70% of fund managers don’t plan to increase their outsource, Despite increasing cost of running the business ( Global hedge fund and investor survey). Currency trading around the world has reached $ 4 tirilirion in a day and this is fuelled by investor from wealthy nation seeking to diversify beyond their home market during economic crises (Chong &Vivian). According to Morningstar (2013), small investor are increasing their forex trading exposure through making piling into mutual fund which make bet on currencies as their main strategy. Also through exchange- traded mutual fund, whose share trade like stock ,are making currency market more accessible to small investors (Norman). According to Morningstar there are now 44 currency ETFs which is arise from 16 in 2007 while in 2004 there was only one. History of Forex chart form patterns that have been recognized and categorized for more than 100 years, and depending manner in which many patterns are repeateted, hence of fund to be traded projection is made possible (Basic Forex forecast methods). While fund managers trade fund, all fund are subjected to strong oversight that comes from both internal and external source (Skandia. Press centre). Examples are board of directors and financial industry regulation association (Nakakubo.). Investment company act and tax law provide guide on operation of, diversification on standards of all mutual funds, close end fund, ETFs and UITs. (Triennial Central bank). Works Cited Arnaud, Jeulin. Global statistics.2011. Web March 23, 2013 http://www.forexkills.com Basic Forex forecast methods: Technical analysis and fundamental.2013. Web March 23, 2013 http://www.babypips.com/school/ Dow Jones& company, currency trading soar. 2013 .Web March 23, 2013 http:// online.wsj.com/article/sb10001424052748704421 Ernst &Young. Global hedge fund and investor survey 2012.2012. Web March 23, 2013 http://mba.tuck.dartmouth.edu Foremax. Money and fund manager.2013. Web March 23, 2013 http://www.forexmax.com/partners/ Fumio, Nakakubo. Introduction to alterative investment strategies.2007. Web March 23, 2013 http://www.nli-research.co.jp/.../eco0211022.html Investment company institute. Investment company fact book: A Review of Trends and Activity in the Investment Company Industry.2011.Web March 23, 2013 http://www.icifactbook.org Investment company institute .Investment company fact book :A Review of Trends and Activity in the U.S . Investment Company Industry.2012. Web March 23, 2013 http:// www.icifactbook.org Paul Norman. Fund manager’s survey. 2008. Web March 23, 2013 http://www.propertyfundsresearh.com Morningstar. Mutual fund strategies.2013. Web March 23, 2013 http://www.Morningstarfunds.ie/ie/funds McKinsey & company. Asset management industry: outcome are the new alpha.2012 Web March 23, 2013 http://www.tradeking.com/trading/platform/tradingstock-etfs- and mutual-funds Tower Watson. The world 500 largest asset managers. 2010. Web March 23, 2013 http// www.towerswatson.com Terence, Chong and Vivian. Wong Asset Management Industry Development in Hong Kong, Singapore and China.2012. Web March 23, 2013 http://www.igef.cuhk.edu.hk Skandia. Press centre. The future of global fund management industry survey. 2010 Web March 23, 2013 http://www.skandia.presscentre.com/.../... Triennial Central Bank . Triennial Central Bank Survey of foreign exchange. 2010. Web March 23, 2013 http://www.bis.org/pupbl/rpfx10.html Read More