On: Are Index Funds Eating the World?

[mysterypie]

> asset managers are paid for getting more assets under management, not their fund's profits.

I've always wondered why they aren't paid a percentage of profits? That would align their interests with the customers'.

[OscarCunningham → mysterypie]

They're generally paid both. They often charge "two and twenty" meaning 2% yearly of the assets under management and 20% of the profit. (Of course they don't absorb 20% of the losses in a bad year)

[smallnamespace → OscarCunningham]

That's only hedge funds, which are a small fraction of total fund capitalization.

[OscarCunningham → smallnamespace]

What are the percentages of the market occupied by different fund types? Where would I go to look that up?

[smallnamespace → OscarCunningham]

http://www.hedgefundfacts.org/hedge/wp-content/uploads/2009/...

Page 4

"Hedge funds as a percent of total: 1.1%"

[janpieterz → mysterypie]

Or even a percentage that increases by the percentage of profit.