Some fund managers, acting as lending agent, keep 50% or more of the income from securities lending; there is no legal limit. "I cannot mention names," a leading investment consultant told me, "but there are funds doing securities lending where 100% of the revenues go back to the adviser."
Your fund should lend out your securities, but the proceeds should go to you. And fund managers should reinvest the collateral only in absolutely safe securities. The current system, where they keep half the gains and stick you with all the risks, has got to go.
Report: BlackRock Wins BGI Bidding War [View article]
Most of the money that BGI makes comes from securities lending," said Matt Hougan, editor of IndexUniverse.com.
online.wsj.com/article...
Is Your Fund Pawning Shares at Your Expense?
Some fund managers, acting as lending agent, keep 50% or more of the income from securities lending; there is no legal limit. "I cannot mention names," a leading investment consultant told me, "but there are funds doing securities lending where 100% of the revenues go back to the adviser."
Your fund should lend out your securities, but the proceeds should go to you. And fund managers should reinvest the collateral only in absolutely safe securities. The current system, where they keep half the gains and stick you with all the risks, has got to go.
online.wsj.com/article...