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Argument: Argument thesis  Social Security should not be privatized
Node type: Node refutes parent assertion  This node refutes its parent
Parent Node: Node refutes parent assertion  If that were true, you could never lose money investing in a fund
Node Text: Don't confuse management fees with proifits

Investment funds charge management fees to pay for the salaries of the managers, researchers, etc, as well as the back office fees charged by exchanges. These fees are generally paid once, either on entry into or exit from the fund. These fees surely cover management cost and then some. But they are not really viewed as a revenue stream.

Where funds are expected to make their profit is from the investments themselves. As such, any worthwhile fund manager will have a percentage of their own funds invested in the fund.

Hedge funds operate a little differently, but again, the major profit source is expected to come from the investment strategy.

Bottom line - if the funds didn't generate returns in excess of fees, nobody would invest and they would be forced into liquidation.
Node Created: coolgeek — 2008-06-26 14:39:14

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