A fund worth $63bn? It was simple

Article Abstract:

Observers have for many years expressed reservations about Fidelity's Magellan Fund, which is now the largest mutual fund in the world. Many feel that the fund has become too big to manage successfully, but it is still managing to grow, having now reached $63 billion. Its success is partly due to skillful marketing work by Fidelity, and partly due to the fact that the majority of the benefits of selling retail investment products go to a very small number of fund managers.

Fidelity Magellan Fund

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Inertia index has a better track record than many fund managers

Article Abstract:

It is often the case that the investment decisions of fund managers have a neutral or even a negative impact on the value of funds over time, according to research undertaken by NatWest Markets. In most cases, investment funds perform no worse when managed according to the inertia principle than when they are actively managed. Very often, the returns produced by active management do not justify the expense associated with purchasing and selling large numbers of shares.

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Fund management companies have had a phenomenal run - but they would be wrong to assume it will last forever

Article Abstract:

There have been very significant changes in the UK fund management industry since the late 1980s. Fund management has become extremely profitable, mainly because of its fee structure, which usually takes the form of an annual management fee connected with the value of funds under management. However, fund managers are now finding that costs are rising more rapidly than they should be, and this could bring difficulties in the future.

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