Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Haaga: Shoulda, Woulda, Coulda Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, July 13, 2004

Haaga: Shoulda, Woulda, Coulda

by: Theresa Sim

Could it be possible that mutual fund companies were simply outfoxed by hedge funds and other trading abusers? Paul Haaga, ICI chairman and executive vice president of Capital Research, thinks so.

In an interview with the LA Times, Haaga reflects on what went wrong and how fund companies could have prevented the scandals.

Fund companies did a good job of understanding the late trading risk from 401(k) investors, but neglected to consider the incentives that international arbitrageurs and hedge funds could realize from trading in mutual funds, said Haaga.

"What we didn't realize was that, with [stock-index] futures trading in some of the non-U.S. markets, that those things were sending such clear signals about the next day's [U.S.] markets," said Haaga.

"[W]e could have thought better about was hedge funds' investment in mutual funds. They don't need to have 'sure things' [in their trading] or make a lot of money on every trade. They just need to be doing it enough times, and putting down enough money, and they'll make money in the end. We didn't properly evaluate the attractiveness of [market-timing] to other people," he continued.

But what about the "bad apples" in the industry who realized these incentives were out there and capitalized on them?

"[T]he executives who cut these deals…I haven't searched their souls, but I think some of them may have been more stupid than venal," Haaga told the LA Times

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use