The Fund Industry: How Your Money is Managed, 2nd Edition

Foreword

I like this book because it gives a real understanding of the mutual fund industry, the provider of the most important investing vehicles for most people. Intelligent investing requires just the kind of understanding that is given in this book. One needs to know where the returns are coming from and how the mutual fund's strategy relates to one's own issues. One should not rely exclusively on others' advice, or simple tabulations of past performance of mutual funds, or predictions of future performance. The actual record of such predictions ranges from uneven to wrong.

The book clearly explains the different types of mutual funds and how they are each run to achieve their objectives. It has a particularly good chapter on how investors can utilize fund measurement services, like Lipper or Morningstar, which apply their own methodologies to analyze fund performance. Their analyses can be easily misused by investors who do not know what they are doing.

The second edition has expanded coverage of the newest and most sought-after products in the industry today—with separate chapters on exchange-traded funds and hedge funds. And it reviews the spectacular growth of the liquid alternative funds.

The book goes on to identify the key strategies that fund investors and managers can adopt to optimize their tax efficiency with mutual funds. These include tax-advantaged vehicles for retirement planning, college savings, and charitable giving. Taxation matters immensely for investment ...