Mutual funds: temporary problem or permanent morass?

The improprieties in the mutual fund industry that surfaced in the fall of 2003 prompted the passage and drafting of legislation and regulations that cover nearly every facet of mutual fund pricing and operations. While this regulatory flurry is clearly intended to protect shareholders’ interests, the question remains: How will these scandals and regulatory changes ultimately affect mutual fund investors? ; When considering the problems inherent in mutual fund management and the best ways to address them, it is important, the author stresses, to understand current business practices in the industry, who these benefit, and why they exist. ; Mutual fund investors, the author explains, are legally considered owners of a company that pools the investment capital of many investors. In practice, however, investors are often viewed (and often view themselves) as customers of a management firm that acts as an investment adviser. ; Regardless of which view is taken, inherent conflicts exist between investors and advisers because the two parties have differing objectives: Investors want to receive higher returns on their investment while minimizing risk, and advisers want to maximize their own profits without exerting undue efforts (costs). ; The author reviews a number of possible solutions to these conflicts of interest, including compensation-based fee structures, a separation of functions, proposed regulatory and legislative changes, and monitoring and information disclosure. ; By far the strongest weapon investors have in resolving these conflicts is their own demand, the author concludes. “When unfettered and free of frictions, a competitive marketplace will supply the products and services investors demand at the lowest possible price,” she notes.Mutual funds

Annotated List of Stoneflies (Plecoptera) from Stebbins Gulch in Northeastern Ohio

(excerpt) Stebbins Gulch is situated within property owned by The Holden Arboretum in northwestern Geauga County, Ohio, approximately 8.0 km east of the village of Kirtland (Fig. 1). Physiographically, the Arboretum is included within the Southern New York Section of the Appalachian Plateau Province (Feldman et al., 1977). This Section was overridden by several advances of Pleistocene glaciation, the latest of which receded some 13,000 years ago. It is characterized by poorly drained surfaces containing many bogs, ponds, and lakes, except near the Portage Escarpment where small rivers have excavated relatively deep valleys

The determinants of the flow of funds of managed portfolios: mutual funds versus pension funds

Due to differences in financial sophistication and agency relationships, we posit that investors use different criteria to select portfolio managers in the retail mutual fund and fiduciary pension fund industry segments. We provide evidence on investors’ manager selection criteria by estimating the relation between manager asset flow and performance. We find that pension fund clients use quantitatively sophisticated measures like Jensen’s alpha, tracking error, and outperformance of a market benchmark. Pension clients also punish poorly performing managers by withdrawing assets under management. In contrast, mutual fund investors use raw return performance and flock disproportionately to recent winners but do not withdraw assets from recent losers. Mutual fund manager flow is significantly positively related to Jensen’s alpha, a seemingly anomalous result in light of a relatively unsophisticated mutual fund client base. We provide preliminary evidence, however, that this relation is driven by a high correlation between Jensen’s alpha and widely available summary performance measures, such as Morningstar’s star rating. By documenting differences in the flow-performance relation, we contribute to the growing literature linking fund manager behavior to the implicit incentives to increase assets under management. We show that several forces combine to weaken the incentive for pension fund managers to engage in the type of risk-shifting behavior identified in the mutual fund literature.Mutual funds ; Pensions ; Investments

Star power: the effect of Morningstar ratings on mutual fund flows

Morningstar, Inc., has been hailed in both academic and practitioner circles as having the most influential rating system in the mutual fund industry. We investigate Morningstar’s influence by estimating the value of a star in terms of the asset flow it generates for the typical fund. We use event-study methods on a sample of 3,388 domestic equity mutual funds from November 1996 to October 1999 to isolate the “Morningstar effect” from other influences on fund flow. ; We separately study initial rating events, whereby a fund is rated for the first time on its 36-month anniversary, and rating change events. An initial five-star rating results in average six-month abnormal flow of $26 million, or 53 percent above normal expected flow. Following rating changes, we find economically and statistically significant abnormal flow in the expected direction, positive for rating upgrades and negative for rating downgrades. Furthermore, we observe an immediate flow response, suggesting that some investors vigilantly monitor this information and view the rating change as “new” information on fund quality. Overall, our results indicate that Morningstar ratings have unique power to affect asset flow.Mutual funds

Annotated List of Stoneflies (Plecoptera) from Stebbins Gulch in Northeastern Ohio

(excerpt) Stebbins Gulch is situated within property owned by The Holden Arboretum in northwestern Geauga County, Ohio, approximately 8.0 km east of the village of Kirtland (Fig. 1). Physiographically, the Arboretum is included within the Southern New York Section of the Appalachian Plateau Province (Feldman et al., 1977). This Section was overridden by several advances of Pleistocene glaciation, the latest of which receded some 13,000 years ago. It is characterized by poorly drained surfaces containing many bogs, ponds, and lakes, except near the Portage Escarpment where small rivers have excavated relatively deep valleys

Broker Incentives and Mutual Fund Market Segmentation

We study the impact of investor heterogeneity on mutual fund market segmentation. To motivate our empirical analysis, we make two assumptions. First, some investors inherently value broker services. Second, because brokers are only compensated when they sell mutual funds, they have little incentive to recommend funds available at lower cost elsewhere. The need for mutual fund families to internalize broker incentives leads us to predict that the market for mutual funds will be highly segmented, with families targeting either do-it-yourself investors or investors who value broker services, but not both. Using novel distribution channel data, we find strong empirical support for this prediction; only 3.3% of families serve both market segments. We also predict and find strong evidence that mutual funds targeting performance-sensitive, do-it-yourself investors will invest more in portfolio management. Our findings have important implications for the expected relation between mutual fund fees and returns, tests of fund manager ability, and the puzzle of active management. Furthermore, they suggest that changing the way investors compensate brokers will change the nature of competition in the mutual fund industry.

Electrochemical Impedance Spectroscopy Based Biosensors: Mechanistic Principles, Analytical Examples and Challenges towards Commercialization for Assays of Protein Cancer Biomarkers

Impedimetric affinity biosensors are, without any doubt, among the most sensitive analytical devices available, offering low limits of detection and wide linear response ranges. There are, however, only a few papers detailing the application of impedimetric biosensors for the analysis of clinically relevant samples with due clinical performance. The fact that these devices have not found their way to any commercial or clinical use to date might be surprising, since an electrochemical assay platform based on portable potentiostats is a success story for monitoring a range of clinical parameters such as ions, haematological indicators and glucose. This review discusses the reasons behind this discrepancy and addresses the barriers to be overcome in order to achieve the point-of-care diagnostics using such devices for detection of protein oncomarkers approved by FDA. The final part of the review covers the most recent progress in the area.The financial support received from the Slovak Scientific Grant Agency VEGA 2/0137/18 and 2/0090/16 and the Slovak Research and Development Agency APVV 17-0300 and APW-15-0227 is acknowledged. The research received funding from the European Research Council (no. 311532). This publication is the result of the project implementation: Centre for materials, layers and systems for applications and chemical processes under extreme conditions - Stage I, ITMS No.: 26240120007, supported by the ERDF

A graphene-based glycan biosensor for electrochemical label-free detection of a tumor-associated antibody

The study describes development of a glycan biosensor for detection of a tumor-associated antibody. The glycan biosensor is built on an electrochemically activated/oxidized graphene screen-printed electrode (GSPE). Oxygen functionalities were subsequently applied for covalent immobilization of human serum albumin (HSA) as a natural nanoscaffold for covalent immobilization of Thomsen-nouvelle (Tn) antigen (GalNAc-O-Ser/Thr) to be fully available for affinity interaction with its analyte—a tumor-associated antibody. The step by step building process of glycan biosensor development was comprehensively characterized using a battery of techniques (scanning electron microscopy, atomic force microscopy, contact angle measurements, secondary ion mass spectrometry, surface plasmon resonance, Raman and energy-dispersive X-ray spectroscopy). Results suggest that electrochemical oxidation of graphene SPE preferentially oxidizes only the surface of graphene flakes within the graphene SPE. Optimization studies revealed the following optimal parameters: activation potential of +1.5 V vs. Ag/AgCl/3 M KCl, activation time of 60 s and concentration of HSA of 0.1 g L−1. Finally, the glycan biosensor was built up able to selectively and sensitively detect its analyte down to low aM concentration. The binding preference of the glycan biosensor was in an agreement with independent surface plasmon resonance analysis.The financial support received from the Slovak Scientific Grant Agency VEGA 2/0137/18 and 2/0090/16 from the Slovak Research and Development Agency APVV 17-0300 is acknowledged. This publication is the result of the project implementation: Centre for materials, layers and systems for applications and chemical processes under extreme conditions—Stage I, ITMS no.: 26240120007, supported by the ERDF. This publication was supported by Qatar University Collaborative Grant QUCG-CAM-19/20-2. The findings achieved herein are solely the responsibility of the authors.Scopu

Stimulus-dependent maximum entropy models of neural population codes

Neural populations encode information about their stimulus in a collective fashion, by joint activity patterns of spiking and silence. A full account of this mapping from stimulus to neural activity is given by the conditional probability distribution over neural codewords given the sensory input. To be able to infer a model for this distribution from large-scale neural recordings, we introduce a stimulus-dependent maximum entropy (SDME) model---a minimal extension of the canonical linear-nonlinear model of a single neuron, to a pairwise-coupled neural population. The model is able to capture the single-cell response properties as well as the correlations in neural spiking due to shared stimulus and due to effective neuron-to-neuron connections. Here we show that in a population of 100 retinal ganglion cells in the salamander retina responding to temporal white-noise stimuli, dependencies between cells play an important encoding role. As a result, the SDME model gives a more accurate account of single cell responses and in particular outperforms uncoupled models in reproducing the distributions of codewords emitted in response to a stimulus. We show how the SDME model, in conjunction with static maximum entropy models of population vocabulary, can be used to estimate information-theoretic quantities like surprise and information transmission in a neural population.Comment: 11 pages, 7 figure

Altered Neurocircuitry in the Dopamine Transporter Knockout Mouse Brain

The plasma membrane transporters for the monoamine neurotransmitters dopamine, serotonin, and norepinephrine modulate the dynamics of these monoamine neurotransmitters. Thus, activity of these transporters has significant consequences for monoamine activity throughout the brain and for a number of neurological and psychiatric disorders. Gene knockout (KO) mice that reduce or eliminate expression of each of these monoamine transporters have provided a wealth of new information about the function of these proteins at molecular, physiological and behavioral levels. In the present work we use the unique properties of magnetic resonance imaging (MRI) to probe the effects of altered dopaminergic dynamics on meso-scale neuronal circuitry and overall brain morphology, since changes at these levels of organization might help to account for some of the extensive pharmacological and behavioral differences observed in dopamine transporter (DAT) KO mice. Despite the smaller size of these animals, voxel-wise statistical comparison of high resolution structural MR images indicated little morphological change as a consequence of DAT KO. Likewise, proton magnetic resonance spectra recorded in the striatum indicated no significant changes in detectable metabolite concentrations between DAT KO and wild-type (WT) mice. In contrast, alterations in the circuitry from the prefrontal cortex to the mesocortical limbic system, an important brain component intimately tied to function of mesolimbic/mesocortical dopamine reward pathways, were revealed by manganese-enhanced MRI (MEMRI). Analysis of co-registered MEMRI images taken over the 26 hours after introduction of Mn^(2+) into the prefrontal cortex indicated that DAT KO mice have a truncated Mn^(2+) distribution within this circuitry with little accumulation beyond the thalamus or contralateral to the injection site. By contrast, WT littermates exhibit Mn^(2+) transport into more posterior midbrain nuclei and contralateral mesolimbic structures at 26 hr post-injection. Thus, DAT KO mice appear, at this level of anatomic resolution, to have preserved cortico-striatal-thalamic connectivity but diminished robustness of reward-modulating circuitry distal to the thalamus. This is in contradistinction to the state of this circuitry in serotonin transporter KO mice where we observed more robust connectivity in more posterior brain regions using methods identical to those employed here