How your money is managed: the Mutual Fund industry up close (transcript)

This transcript is of a conversation I had with Theresa Hamacher (listen to the podcast), author of the new book,  The Fund Industry: How your Money is Managed. You can always subscribe to Tradestreaming Radio on iTunes.

Today’s episode is all about mutual funds, the product and the industry. As a guest on the program we have Theresa Hamacher, a co-author of the new book, The Fund Industry: How Your Money is Managed. She co-wrote the book along with Robert Pozen. Hamacher is currently the president at NICSA, a position that she’s held since March of 2008. For those of you who don’t know, NICSA is the National Investment Community Service Association, which bills itself as the leading provider of independent education and networking forums to professionals in the global investment management community.

Mutual Funds: How your $$ is managed by tradestreaming

Theresa had her background in investment management before that. She was the chief investment officer, CIO, for Pioneer, where she oversaw $15 billion in global equity in fixed income assets. Before that she was the CIO of Prudential Mutual Funds, where she supervised over $60 billion dollars in assets. Earlier in her career she was an equity fund manager. She began her career as a securities analyst.

Clearly the book is written from Hamacher’s extensive experience and perspective within the mutual fund industry. I do broaden the conversation to try to incorporate how the mutual fund industry is coping with new product innovation in the ETF, the exchange traded fund community.

I think talking about mutual funds is an interesting topic right now. They are a well designed product for a variety of situations. There seems to be an overriding mantra that sort of was born out of do it yourself investing that somehow mutual funds are inherently bad. I don’t see things that way. They have their time and their place. They’re particularly good products for scenarios where it doesn’t necessarily make sense to have an index product.

Exchange traded funds are obviously the fastest growing security, in terms of gaining new assets within the industry. It’s also interesting to me that mutual funds view exchange traded funds as competitors, and not necessarily as just new products, or innovative products in the industry.

I ask Hamacher a lot of these questions, but one thing that’s important to me is that when I speak to investors they say first thing, “Mutual funds are bad.” They have a connotation obviously, particularly ones that are sold with the sales load of being expensive, and that’s true. Continue reading “How your money is managed: the Mutual Fund industry up close (transcript)”

How your money is managed: the Mutual Fund industry up close (podcast)

Mutual funds have introduced millions of Americans to investing in the stock market.  While their popularity and usage may have changed throughout the last 30 years,mutual funds still play a critical role in many portfolios.  Yet, many investors — smart, educated people — still don’t quite understand how they work.


In this episode of Tradestreaming Radio (if you don’t see it below, click here), we talk to Theresa Hamacher, a true mutual fund industry veteran.  Along with Bob Pozen, Hamacher is the co-author of the new book, The Fund Industry: How Your Money is Managed (Wiley Finance).  It’s a good read and an important book to have in your investment library because it’s scope is so broad.  The book discusses the history of mutual funds, their legal structure, career paths in the industry, how different funds are managed (stocks vs. bonds), and how fund analysts decide which securities to invest in.

Our discussion meanders through different facets of the industry, investing, and Hamacher’s book.

We discuss:

  • how to use mutual funds
  • the asset management industry
  • the financial crisis and how funds were involved/affected
  • how mutual funds shape up against exchange traded funds (ETFs).
  • why the mutual fund industry views the upstart ETF industry as competitive.

Listen below