¶ … investment in the mutual fund industry and how fast it's growing. This growth was especially rapid during the 1990s. 401(k) plans have helped out with this growth, and contributed to the large number of mutual funds. Because of the proposed changes to Social Security, and also helped in some way by the Internet, nearly half of all households in the United States own some form of stock. Those who work in the financial industry are also happy about this growth in mutual funds. It means more opportunities for work for them. This article takes a closer look at what goes on, on a daily basis, in the life of a mutual fund accountant.
A mutual fund works much the same way that a partnership does. Mutual funds don't pay taxes, and the earnings that they make go straight through them and to their shareholders who have the responsibility of reporting these earnings on their income tax returns. One of the things that mutual funds accountants must do is pay particular attention to the net asset value. This is the main calculation that they are required to do. It is basically the per-share value of a mutual fund on any given day. It lets investors determine the value of the funds that they have, and this helps them to determine whether they want to keep a particular stock or sell it and purchase something else.
Also important in mutual funds accounting is the management team. This usually consists of a Board of Directors, a Counsel that provides legal advice, and an Auditor that prepares the annual report. There is also usually a distributor, who sells shares of the funds to others, and an adviser, who makes decisions regarding buying and selling. An administrator, a custodian, and an accounting agent complete the group, and the atmosphere on most days is one of tension as they work to make money for everyone involved.
b) It is required that the "summary prospectus appear at the front of a fund's prospectus." (Security Exchange Commission (b)) c) Amendments have been made so that the Internet can be used to give important 'information' inclusive of "description of the fund's investment objectives and strategies, fees, risks, and performance." (Security Exchange Commission (b)) d) The Form N-1A, for mutual funds, should have the "key information at the front of its statutory
The first aspect of successful mutual fund performance is to define a benchmark. Most funds have specific benchmarks that they use both internally and externally. Externally, the benchmarks are often used in promotional material, relating the performance of the fund to the performance of the Dow Jones Industrial Index or some other broad-based market indicator. Funds operating in specific sectors will benchmark against a sector index. The idea behind
Mutual Fund Manager Definition of the Fund Manager Position and Major Responsibilities Securities and Exchange Commission defines a mutual fund as a company that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, other securities or assets, or some combination of these investments (U.S. Securities and Exchange Commission, 2008). Mutual funds are in turn operated by professional money managers, the fund managers, who invest the
When looking at risk, the fund does have a beta higher than that of its large cap blended peers. The beta of the fund is roughly 1.23 as compared with a beta of 1.04 for many of its peers. This can be attributed to the large concentration in financial stocks which tend to have high betas relative to the market. This is to be expected as financial shares raise disproportionately
International Mutual Funds Mutual Funds, the dynamic market: The business of mutual funds changes continuously and one of the things that is done is to replace the manager of the portfolio, or even change the investment strategy for the fund. If the fund has been badly affected, the practice is to stop buying the risky growth stocks and instead buy the slower industrial and consumer stocks. This is the situation now at
Fidelity Large Cap Stock Fund is a domestic equity fund, comprised of 91% domestics and 9% international equities. As such it is not intended to mirror the performance of either the Dow or S&P 500, but to serve as a competitor product. The foreign stocks are mostly from the UK, Canada, Israel and Ireland. The fund has very little foreign exchange exposure, with 95.91% of the stocks denominated in the
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