According to Swanson, the mutual fund’s “worn down parts” include a pricing model that isn’t working in today’s marketplace, a tax structure that is no longer competitive and a value proposition – active management – that is wobbly and spurring a quest for more reliable performance outcomes.
The free whitepaper is available for download at http://www.swandog.com.
Exerpt from Whitepaper:
“Mutual Funds are No Longer a Growth Business
Every product has a life cycle. And from all indications, funds are at or nearing
maturity. Classic maturity hallmarks, like slowing growth, market saturation, margin
compression, excess capacity and emergence of substitute products stand as solid
The only thing still missing is consolidation. Next?
Product Alternatives are on the Rise—and This Time They’re Selling
As we have mentioned, mature markets lead to substitute products designed to
capitalize on the leader’s “tired legs.” The rapid growth of ETFs, a superior alternative
to funds in many ways (fees, trading, transparency and reliability of outcome) is but
the latest contender. And it’s most assuredly not the last given the amount of money
in play. However, unlike previous threats to funds dominance, this one has legitimacy.
If ETF providers can solve the distribution pricing disparity with funds—look out.
Note to ETF providers—keep a vigilant watch over your shoulder. Nothing lasts
forever, even TNBT-The Next Big Thing.”
FUND DOOMSDAY CLOCK LAUNCHED
In conjunction with the white paper, SwanDog launched its own Mutual Fund Doomsday Clock to call attention to the need for firms to focus on the problem at hand.