Draw back safety (buffer) funds - Web page 3

alex_686 wrote: ↑Mon Sep 16, 2024 12:24 pm

Valuethinker wrote: ↑Mon Sep 16, 2024 12:13 pm

nisiprius wrote: ↑Mon Sep 16, 2024 9:52 am

There’s additionally a threat that if rates of interest fall, these auto-renewing merchandise will renew with lousier and lousier phrases and traders could not discover.

In software program we are saying “this can be a characteristic. Not a bug”. You simply need to see it from the producer perspective, relatively than the buyer one

First, these merchandise get dearer if rates of interest rises or if volatility will increase. They turn out to be cheaper if charges fall.

Second, Valuethinker, I’m lacking your level. If it turns into dearer to supply this safety it’s as a result of the choices turn out to be dearer. The expense ratio isn’t going to extend, so it isn’t like more cash will move into both the portfolio supervisor or fund sponsor.

Alex

You might be rather more on high of this than I’m and I had confused the price of the product with the Expense Ratio.

I used to be pondering that if mediocre subsequent efficiency was a foul factor for the fund administration business, they would not let traders keep in awful worth merchandise. I feel Constancy Magellan nonetheless has many billions of belongings? ($60bn at peak within the Nineteen Nineties?). A pleasant little earner for the fund supervisor.

*Anyone* is benefiting from the autumn in rates of interest.