ICI writes "The Facts on Mutual Funds and Securities Lending" on its Viewpoints page. They say, "Recent stories in the press have addressed the issue of securities lending, particularly in the context of 401(k) plans. For example, a March 16 story in the Wall Street Journal ("Disclosure Sought on Fund Lending") suggests that securities lending' in 401(k) plans "prevented some employers and investors from withdrawing their money during the financial crisis." A few clarifications are in order. The Journal article correctly states that mutual funds, like many investment pools, lend securities (typically to broker-dealers). Doing so allows mutual funds to generate incremental income and improve total returns with a reasonable amount of additional risk. Securities lending also provides liquidity to the market by enabling brokers to cover failed trades or short positions. But when the Journal's story refers to plan sponsors being restricted from withdrawing from an investment option that participated in securities lending, it is not referring to mutual funds, but rather to non-registered investment pools offered to retirement plans."

Email This Article




Use a comma or a semicolon to separate

captcha image

Daily Link Archive

2024 2023 2022
November December December
October November November
September October October
August September September
July August August
June July July
May June June
April May May
March April April
February March March
January February February
January January
2021 2020 2019
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2018 2017 2016
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2015 2014 2013
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2012 2011 2010
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2009 2008 2007
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2006
December
November
October
September