Magazine article American Banker

Fund Execs Celebrate Handling Market Downturn

Magazine article American Banker

Fund Execs Celebrate Handling Market Downturn

Article excerpt

Mutual fund executives kicked off their annual convention in Washington last week by patting themselves on the back for keeping a market downturn from evolving into an investor stampede.

"A major reason for this investor steadfastness, in the face of uncertain markets and adverse events, is investor education," said Matthew Fink, president of the Investment Company Institute.

Mr. Fink and ICI chairman Jon S. Fossel, flanked by two large video screens so an audience of more than 1,500 could see them, boasted that fund assets have continued to grow, albeit at a slower rate.

"Bond fund redemptions did not occur in a big panic but as a steady response to rising interest rates, which led many investors simply to transfer from bond funds to other types of mutual funds," Mr. Fink declared.

And Mr. Fossel said fund asset growth is still something to brag about, although it has slowed to an annual rate of 17.1% over the past five years, from 26.4% in the preceding decade. Mutual funds now hold $2.3 trillion of assets.

"Most other industries undoubtedly envy our so-called 'slower' growth rate of recent years," said Mr. Fossel, who is chief executive of Oppenheimer Management Corp., a New York company that manages $29 billion of funds.

Mutual fund executives at banks were upbeat, saying they felt the two ICI leaders spoke for them as well as mutual fund companies, the dominant members of the organization.

"I see a spirit of cooperation between banks and mutual fund companies in terms of service," said Donald A. McMullen Jr. …

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