Fund investors may not realize it, but some of the management fees they pay each year may be going to Washington lobbyists.
Mutual funds, which are technically called investment companies, have a trade association, the Investment Company Institute, that looks out for their best interest. Sometimes these interests are not the best interests of actual fund shareholders. Apparently the ICI was active in 2007 nuzzling up to politicians:
The mutual fund industry's trade association, the Investment Company Institute, paid Covington & Burling $240,000 in 2007 to lobby on tax issues.
The firm lobbied Congress and the Treasury Department on the taxation of mutual funds and mutual fund investors, according to a form posted online Feb. 13 by the Senate's public records office."
Lobbists may be ranked just above lawyers on many people's least popular list, but in this case the ICI's lobbying could be completely benign. Fund companies would like to get favorable tax treatment for fund shareholders. This would be good for shareholders and fund companies would have a more marketable product. However, sometimes fund companies want to rub out competing products (exchange traded notes perhaps...) that may offer tax and fee savings to investors who would ordinarily choose mutual funds.
Fund investors may not realize it, but some of the management fees they pay each year may be going to Washington lobbyists.
Mutual funds, which are technically called investment companies, have a trade association, the Investment Company Institute, that looks out for their best interest. Sometimes these interests are not the best interests of actual fund shareholders. Apparently the ICI was active in 2007 nuzzling up to politicians:
The mutual fund industry's trade association, the Investment Company Institute, paid Covington & Burling $240,000 in 2007 to lobby on tax issues.
The firm lobbied Congress and the Treasury Department on the taxation of mutual funds and mutual fund investors, according to a form posted online Feb. 13 by the Senate's public records office."
Lobbists may be ranked just above lawyers on many people's least popular list, but in this case the ICI's lobbying could be completely benign. Fund companies would like to get favorable tax treatment for fund shareholders. This would be good for shareholders and fund companies would have a more marketable product. However, sometimes fund companies want to rub out competing products (exchange traded notes perhaps...) that may offer tax and fee savings to investors who would ordinarily choose mutual funds.
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