Why will capital markets continue to need both short- and long-term capital?
Capital markets will continue to need short-term capital to provide the liquidity necessary for the smooth functioning of our markets as well as accountability by responsible managers. Long-term capital investment provides the capital to create long-term industries of the future, such as clean energy, advanced technological infrastructure, advances in health technology, and new forms of transportation, among many other uses. As an example, the World Economic Forum sees that by 2020, the world will need an annual investment of $500 billion in order to reduce C02 emissions. This investment is usually supported by the long-term investment community by the investments made in bonds that may finance projects and in the stocks of companies developing this technology.
What are some future trends that we can see in the mutual fund business?
Expert authors at Investopedia believe that with the explosion of low-cost ETFs, and the popularity of index funds by the individual investing community, mutual funds will be under pressure to eliminate higher-expense classes of funds in favor of lower-cost investment products in order to survive.
How will mutual fund companies cut costs, in order to compete with ETFs and offer more lower-cost investment products?
Experts at Deloitte believe mutual funds will outsource much of their administrative functions, consolidate their technology platforms, and reassess their physical locations in order to reduce expenses that are passed on to individual investors.
Deloitte Touche Tohmatsu Ltd., the world's largest professional services network, expects mutual funds to outsource administrative functions and consolidate technology platforms to save investors money.
