Читать книгу Mutual Funds For Dummies - Eric Tyson - Страница 43

Fund companies don’t work like banks and insurance companies, hundreds of which have failed in decades past. (The number of companies going under spiked during the late 2000s recession.) Banks and insurers can fail because their liabilities (the money customers have given them to invest) can exceed their assets (the money they’ve invested or lent). When a big chunk of a bank’s loans goes sour at the same time that its depositors want their money back, the bank fails. That happens because banks have less than 20 cents on deposit for every dollar that depositors place with them. Likewise, if an insurance company makes several poor investments or underestimates the number of claims that insurance policyholders will make, it too can fail.

Such failures can’t happen with a fund company. The situation in which the investors’ demand for withdrawals of their investment exceeds the value of a fund’s assets simply can’t occur because for every dollar of assets that a fund holds for its customers, that fund has a dollar’s worth of redeemable securities.

That’s not to say that you can’t lose money in a mutual fund or exchange-traded fund. The share price of a fund is tied to the value of its underlying securities: If the underlying securities, such as stocks, decrease in value, so, too, does the net asset value (share price) of the fund. If you sell your shares when their price is less than what you paid for them, you get back less cash than you originally put into the fund. But that’s the worst that can happen; you can’t lose all your investment in a fund unless every single security owned by that fund simultaneously becomes worthless — an extraordinarily unlikely event.

You may be interested to know that the specific stocks and/or bonds that a mutual fund buys are held by a custodian — a separate organization or affiliate of the fund company. The employment of a custodian ensures that the fund management company can’t embezzle your money (like the infamous crook Bernie Madoff did) or use assets from a better-performing fund to subsidize a poor performer.