A Management Company’s Piece Of Open-Ended Pie
Open-end investment companies usually have contracts with a management company. This organization provides investment advice on a fee basis. The management companies also generally are the underwriters or “sponsors” of the fund or group of funds.
Management fees and underwriting commissions run into large sums when the assets of the funds managed amount to several hundred million dollars and sales of new shares reach many millions of dollars annually. Until 1959, with one exception, the shares of management companies were closely held and not traded publicly. In fact, the Securities and Exchange Commission (SEC) frowned on public offerings of such shares because of provisions in the Investment Company Act.
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Last modified July 24, 2007Author 309 > has blogged 217 times
